Mortgage Info

In the process of shopping for a mortgage, consumers tend to contact several different lenders to get price and rate quotes. Some seem to vary quite a bit from each other and it makes some people wonder why this is. Probably the most honest and straightforward answer is that the numbers quoted over the phone, via email, fax or any other way are just that – quotes. A quote is an estimate and does not have be honored by any lender, mortgage broker or loan officer.

Is this legal? Yes. Is this ethical? Some would argue yes, while others say no. Do some mortgage professionals take advantage of mortgage consumers? Sure. There is no fast or surefire way to get exact rate quotes and price quotes from any lender. The only way that you are going to be able to ensure your rate is to pay a rate-lock fee, which can range from $500 up to approximately one percent of the loan amount. Of course, you couldn’t (or wouldn’t) want to lock-in your rate until you have applied for the loan and fully intend on establishing the loan. Most lock-in fees are applied to your closing costs but are non-refundable if you just walk away from the loan. Be sure to ask these questions though before you pay a lock-in fee.

Unfortunately, there is no way to “lock-in” or guarantee price quotes. Even if you obtain the quotes in writing there isn’t any way that a mortgage consumer can force a lender to honor these fees. The lender is trying to give the consumer a big picture view of what the costs are going to be, however, many factors affect what the costs are in the end.

For example, let’s say that Joe Mortgage has applied for a mortgage with his friend who is a loan officer at a national lender. He received a price quote upfront that did not include a survey of the property. After the house was appraised, however, the lender required that a new survey be conducted on the property. So when Joe Mortgage goes to closing he notices an additional fee on his settlement statement that shows a survey fee. The survey had to happen in order to close on the mortgage. The mortgage lender has already had to pay the survey company (a third party), which means that Joe Mortgage ultimately ends up paying this fee.

Is it fair for the mortgage lender to have to eat the survey fee since they didn’t know at the start of the process that a new survey was going to be required in order to close? The true answer is no it isn’t. Almost anything can pop up during the course of processing a mortgage that in the end may result in additional third party fees. This doesn’t happen every single time, but it is something that you should keep in mind while you are reviewing mortgage price and rate quotes.

Rate and Lender Resources

• Looking For The Best Mortgage (FederalReserve.gov)
• Compare Mortgage Rates (MortgageLoan.com)