After all that hard work shopping for a loan and saving thousands of dollars, it’s finally time to start enjoying the fruits of your labor.

On the other hand, if you’re still thinking about taking the plunge into homeownership, have no fear: there are plenty of ways to get the information you need. 

Invest some time in comparison shopping for a mortgage loan and selecting a lender and a loan officer. Your return on investment can pay off over the long haul. By comparison shopping for a mortgage loan, you'll find the best deal possible. You'll save thousands of dollars, and you'll also have a better overall experience with your lender and loan officer.

To help you find your way through the maze of mortgage loan information, we’ve put together some tips to help you avoid bumps in the road when shopping for a home loan:

1. Keep your pool manageable. 

When it comes to shopping for a home loan, many people prefer to take their time and see every possible option. But that’s not always the best approach.

Mortgage shopping depends on the borrower and the personality type and how they’re wired. The process can seem overwhelming. That’s why it makes sense to have a select few options to compare so borrowers can process and assimilate them.

Borrowers should be wary of shopping with too many lenders, because each time you fill out an application or give a lender your credit card number or Social Security number, you trigger a hard inquiry into your credit history. And if you wind up with several hard inquiries in a short period of time, that could actually lower your credit score

It might make sense to get a few pre-approval letters from different lenders before you start house hunting in earnest, but eventually, it will be time to focus on one lender and lock down a rate.

2. Get a Fees Worksheet

As a borrower, you should always ask for a Fees Worksheet when you apply for a loan. It's very helpful in finding the best deal for your mortgage. In most cases, if you ask for one, the loan officer will be happy to give it to you. You can also get this form online or by phone. 

The federal government requires that lenders provide you with a "Good Faith Estimate" of settlement charges within three days of receiving your mortgage application. However, there are some states where the GFE form is not required and other states that use different forms. 

Regardless of what form is used, the Fees Worksheet will give you an accurate estimate of how much it will cost to close your mortgage loan. It will show all the fees and costs you will have to pay. It's a great tool to use when shopping around and comparing offers from different lenders.

3. Understand a Fees Worksheet and a Loan Estimate

There are two documents that contain the same information regarding costs you’ll need to pay for your mortgage. One is called a Loan Estimate, the other a Fees Worksheet.

You’re given the Loan Estimate after you apply for a mortgage and within three days of the lender receiving your application. It gives you an idea of what fees and charges to expect when you close on your loan, but it’s not binding. This form gives you an estimate of closing costs and other fees associated with your loan. You can compare offers from different lenders using this form, but don’t use it as a substitute for your own due diligence.

The Fees Worksheet is given to you by your real estate agent or loan officer before you’ve applied for a mortgage or made an offer on a property. It is only an estimate and subject to change once you apply for a mortgage, but it may be helpful in deciding how much money to put down on an offer or whether the monthly payment will fit into your budget.

Bottom line: The numbers on the worksheet are estimates and not locked in. Interest rates are fluid and change daily or even more often.

4. Be Careful Interpreting Third-Party Fees

As a home buyer, you shouldn’t make assumptions about which lender has the best offer based on third-party fees alone. 

You’ll want to compare the lender’s third-party fee estimates with what other lenders are charging. But it can be difficult to figure out which numbers are negotiable, and which are not. Some of these fees, such as the title and escrow fees, may be set by the seller, who chooses which company performs those services. In this case, neither you nor the lender has a choice in the matter. In other cases, you might be able to negotiate a lower fee or find another provider. Be sure to ask the lender whether they have a list of preferred providers that they work with regularly—this could make it easier for you to shop around for an alternative option.

5. Think about Timing

When you’re comparing interest rates, it’s crucial to consider the time frame over which the rate will be locked in. It’s a good idea to ask lenders how long your quoted rate is valid and when you can expect it to expire. This is important because if your closing date gets delayed, and your lender doesn’t lock in the rate for a long enough period of time, you could end up at closing with a higher interest rate than you were quoted.

Make sure lenders are using the same time frame for locking in pricing and that it will extend through the closing. A lender might offer a rate that’s a lock for three weeks, but if you anticipate or know your closing date will be five or six weeks out, that’s a problem.

To avoid this situation, we recommend asking about the price lock period before you share any personal information such as your Social Security number or credit card numbers. That way, if you find out there isn’t enough time between now and your anticipated closing date, you can walk away without having to feel concerned about identity theft since they haven’t yet accessed any personal information.

6. Consider Applying for Loan Approval Before Finding a Property

If you apply for loan approval before finding a home, there are some benefits. You'll be able to make an offer to purchase a property when you find it, without having to wait for the lender to process your loan. Also, if you're pre-approved and have your heart set on a certain property, you may be able to negotiate more favorable contract terms with the seller. Finally, in a competitive situation (multiple offers), it's possible your offer will look more attractive because you can close faster.

Some lenders allow borrowers to go through the formal underwriting process — not just pre-approval — without having a property. The borrowers can get a bona fide mortgage commitment with all of the major buyer financials truly underwritten at that point. Then when borrowers make an offer, they can close more quickly.

You'll have to invest some time and effort into comparison shopping for a mortgage loan and selecting a lender and a loan officer. But your return on investment can pay off over the long haul.

Conclusion:

At the end of the day, the only important thing is your comfort with a lender and loan officer. You should not be uncomfortable with the loan officer you choose, nor should you feel that you have to go through with anything you don't want to. This information will help you better navigate through your mortgage loan experience, but in the end it's up to you to take full advantage of all that information you've been given.

Hopefully, the tips that we provided above have helped you deal effectively with the process of getting a mortgage loan. If you already used some of these tips to get helpful information, or if you have other advice for people looking for mortgage loans online, please share your thoughts in the comments below. We always love to hear about new ways to handle issues like these.

Thanks for taking the time to read this article.