Yes, you can shop for a mortgage!

Most people spend hours researching cars but don’t do the same for mortgages, even though a home is (usually!) a much larger investment.

Getting a mortgage can be overwhelming. Personal finances are complex, and there are so many loan options. But here are some reasons why it’s a good idea to invest time and effort into shopping for a mortgage loan, and where to find help if you need it.

Interest Rates Vary

Lower interest rates mean lower monthly payments and potential savings. For example, a $375,000 loan at 7.0% interest has a monthly payment of $1,995, with $418,000+ in interest over 30 years. At 5.8%, the payment drops to $1,760, with about $334,000 in interest over time, saving $84,000 over time!

Fees Differ

Lenders charge different fees, which can affect the overall cost of the loan. The annual percentage rate (APR) includes these fees, making it easier to compare total costs. Lower fees result in an APR closer to the interest rate.

Variety of Loan Types

By shopping around, you can find loans that fit your needs, such as lower down payments, rolled-in closing costs, or special loans for veterans. Different lenders offer various products, so exploring options can lead to better terms. Some loans offer incentives or more appealing terms if you complete homebuyer education courses, for example.

Approval Amounts Vary

Lenders use different criteria to determine how much you can borrow. Shopping around increases your chances of finding a lender that suits your financial situation, which is crucial if your credit or cash flow isn’t perfect.

Backup Options

Having multiple loan offers provides flexibility and peace of mind. If one lender has issues, you can switch to another without delays.

Investing time in mortgage shopping can save you money and ensure you get the best terms. If you need guidance, resources are available to help you navigate the process. The Bilt Foundation is partnered with Money Management International (MMI), a nonprofit organization that can connect you with an expert to navigate mortgages, and anything else along your homeownership journey.