How to Shop for a Mortgage and Compare Rates

In this blog, we will explain how to shop for the best mortgage lenders. The way to do comparative shopping of mortgage lenders can save you tens of thousands. Most people normally go with the first lender they contact. Mortgage rates vary widely between lenders. Mortgage rates even vary among independent P and L mortgage branch offices within the same mortgage company. For example, one branch of ABC Mortgage Bankers may have higher rates than another branch of ABC Mortgage Bankers. Why is it so? Branch managers can set their own margins on the back end which means higher mortgage rates to borrowers.

How To Shop For The Best Mortgage Lenders Online

Google Lenders Of Chicago FHA Loans… Don’t be surprised how many so-called Lenders Of Chicago FHA Loans pop up.

Google Lenders Of Chicago FHA Loans… Don’t be surprised how many so-called Lenders Of Chicago FHA Loans pop up.  However, how many on the list are actual mortgage companies. How many are lead generation companies? Many mortgage companies rely on lead generation companies like Lending Tree, Zillow, and other third-party lead generation companies for purchase and refinance leads. However, these lead companies sell leads to not just one mortgage company but dozens of companies where potential borrowers get bombarded with calls. Searching for actual lenders on the internet can be very helpful for borrowers with challenged credit. Or those looking for a specialty lender where they have no lender overlays. In this article, we will discuss and cover what lender overlays are.

How To Shop For The Best Mortgage Lenders: Local Brick And Mortar Bank or Find Lender On The Internet
How To Shop For The Best Mortgage Lenders: Local Brick And Mortar Bank or Find Lender On The Internet

Borrowers should also not believe everything they read. Most of these companies are simply trying to get as many leads as they can by promising programs, for the most part, they don’t have or virtually nobody qualifies for.

When home buyers are looking for lenders, especially first time home buyers, they do the following:

  • Visit their local bank
  • May get referrals from real estate agents, work, colleagues, friends, family
  • Go on the internet to search for lenders

Most borrowers are not familiar with the mortgage process:

  • This is because it is not often they apply for a mortgage
  • Homebuyers often may purchase a home once every five to ten years and mortgage regulations change often

One important thing borrowers do not understand is that not every lender has the same guidelines.

Understanding Mortgage Guidelines For First-Time Homebuyers

There are two types of mortgage guidelines:

  • Federal mortgage guidelines that are implemented by FHA, VA, USDA, Fannie Mae, Freddie Mac
  • FHA Loans are by far the most popular loan program for first time home buyers
  • It is also the loan of choice for buyers with bad credit or higher debt to income ratios
  • Most mortgage companies have Lender Overlays

Overlays are higher lending standards instituted by the individual lender than the minimum mortgage guidelines required by HUD (On FHA Loans), VA (On VA Loans), USDA (USDA Loans), Fannie Mae, and Freddie Mac (On Conventional Loans).

Google Lenders Of Chicago FHA Loans

According to Michelle McCue, Senior Vice President at GCA Mortgage, a 15-year mortgage industry expert borrowers says that you need to be careful about which online information you are studying.

According to Michelle McCue, Senior Vice President at GCA Mortgage, a 15-year mortgage industry expert borrowers says that you need to be careful about which online information you are studying. Michelle McCue said the following:

Long before you start looking for a mortgage lender and applying for a loan, give your finances a checkup, and improve your standing if needed. This means pulling your credit score and credit reports. You’re entitled to a free credit report from each of the three main reporting bureaus (Experian, Equifax, and TransUnion), which you can get through AnnualCreditReport.com. If your score could use some work, first look through your credit reports for errors, late payments, delinquent accounts in collections, and high balances. Paying down each of your credit cards below 30 percent of the available credit and making on-time payments are the best ways to improve your score, says Jason Bates, vice president of the Purchase division for American Financing, a national mortgage lender based in Aurora, Colorado. In addition to solid credit, lenders want to see that you can handle your existing debt along with a new mortgage payment, so they’ll look at your debt to income ratio. This formula adds up all your monthly debts and divides them by your gross monthly income to get a percentage. Many lenders require a DTI ratio below 43 percent, though some loan programs allow up to 50 percent. To keep your DTI ratio manageable, avoid taking on new loans or making large purchases on credit cards for at least three months before applying for a mortgage. You should stick to this rule until you’ve finalized your mortgage, as lenders can pull up your credit report any time throughout the application process until you close.

Many home buyers will turn to Google. If you Google Lenders Of Chicago FHA Loans are going to find a bunch of lenders that are trying to do just that. Try not to be a piece of these internet marketers. Viewers have to know a little bit more about how FHA lenders think in order to make an educated guess before you even think of shopping your possible loan scenario to someone on Google.

Google Is The Greatest Way To Access Information

Google is the greatest way to access information, find answers, search products, and just search for anything to ever come into existence. However, when borrowers are shopping for any types of loans whether they are VA, USDA, Conventional, or  FHA Loans on the worldwide net, they need to have to exercise some caution.

How Do You Know Whether The Mortgage News Website Is A Licensed Lender Or Lead Generation Company?

Are they contacting an actual lender or a lead generation company?  Lead generation companies will sell information to dozens of mortgage companies. Potential borrowers can get flooded with many solicitation calls by lenders who may or may not be able to help the individual borrower.

Chicago Lenders Of FHA Loans

Many Borrowers may think that just because a Lender offers FHA Loans that they all have the same lending requirements.

Many Borrowers may think that just because a Lender offers FHA Loans that they all have the same lending requirements. This is not the case.

There are two types of FHA Guidelines:

  • HUD has its minimum FHA Guidelines
  • Each FHA mortgage lender can have their own lender requirements call mortgage lender overlays
  • Overlays are their own lender requirements that may surpass the FHA Lending Guidelines

For example, HUD only requires borrowers have a 580 FICO credit score to qualify for a 3.5% down payment FHA home purchase loan:

  • However, most banks require a 640 FICO credit score
  • This higher credit score requirement is called an FHA Lender Overlay on credit scores

Homebuyers who need an FHA Lender with no lender overlays, contact us at Capital Lending Network, Inc. at 800-900-8569 or text us for a faster response. Or email us at contact@capitallendingnetwork.com.


Peter has 7+ years of experience in residential lending. He is a licensed Realtor in the Chicagoland area.

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