What's the best interest rate? And how much are the origination charges? Those are two very important questions. But they aren't ALL the questions. Is there a processing fee? Underwriting fee? Is the rate quoted with points? How about the survey and appraisal? How long is the lock on the rate - does it cost more for a 45 day lock? All these questions are important to get an accurate quote.
This week I reviewed three buyer's good faith estimates and to my surprise, on one HUD there were some hidden charges that accounted for $$1500 in additional fees and a .25% higher interest rate. Now, the buyer did get a $2500 credit because they went with a 'preferred lender' - whatever that means. So the additional $1500 in fees was netted out of the $2500 credit leaving the buyer with a $1000 credit. But they are still paying a higher interest rate which quickly adds up. The $1000 savings will soon translate into many thousands of dollars in extra interest.
Buyers are sometimes private about their finances (ok - always private) and as a Realtor, I respected their privacy and let them do their own homework when it came to lenders. Through experience, I have learned to respect their privacy while helping them understand a Good Faith Estimate early in the process. All the numbers are on a HUD statement at closing anyway, so why not help buyers price shop before they commit to overpaying? It is just another service I can provide my clients!
