How to Be a Savvy Loan Shopper

Be a Savvy Loan Shopper… by Jen Hudson, GRI


When buying a car, you want go out and compare the best deals available, right?  If you find a car that is a “steal,” then you know you should look a little closer at the details and ask why.  Are they offering a warranty, a dealer incentive or maybe you are trading something else in.  Would you agree that these different details could drastically impact your final sales price?

Well, the same principal applies when shopping for a home loan.  You certainly don’t want to wind up with a lemon, so learn to be a savvy shopper.  Here are some tips and common mistakes people make when shopping for a home loan.

· Don’t necessarily choose and trust the first loan officer you come across.  If they are a broker, ask for a copy of their Washington State License.

· Understand the difference between a mortgage broker and mortgage banker.

· Know the difference between “prequalification” and “preapproval.”  You want to shop for homes based on your “preapproval” and know what you are comfortable paying each month before you head out.

· The interest rate is not the primary factor to consider.

· Know which fees can be reduced or removed.  An experienced knowledgeable agent will be able to help you out in this area.

· Don’t use a payment-option ARM or interest-only loan to qualify for a more expensive home that you could otherwise afford.

· Follow-up on the provision of the required mortgage disclosures, including the loan program explanation, good faith estimate, and truth-in-lending statement.  You should receive these within 3 days from your lender.

· Request a written lock agreement (or float) stating when it expires.  Your lock should never come with a fee.

· Ask if there is a pre-payment penalty.

· Ask if you are getting a par rate or paying a premium.  Discover what and where the costs are.  Ask your bank or mortgage broker about Servicing Release Premiums (SRP) and Yield Spread Premiums (YSP.)

· Lastly, get everything in writing!


You are now one more step closer to finding your new home & lifestyle.  I’m always available if you have any questions and have trusted lenders that I work with, should you need a referral or a place to start.


Jen Hudson, GRI (360) 652-1200 or

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