Interest Rates

[Arvind Sundar]

How many lenders does one get interest rate and closing costs quotes from before deciding on which one is the best and which one to go with? 

[Chris Mason]

Hold the rate constant when you do this @Arvind Sundar and check fees/discount points. That's the easiest way to see who can really offer the best deal. Comparing Lender A's 4.5% at no points to Lender B's 4.375% at 0.433 points doesn't tell you anything because for all you know Lender A could do that same 4.375%, but at 0.255 points. So take the first rate that you are quoted, and tell everyone else to quote you at that exact same rate. You can of course adjust from there once you've selected your winner, but holding the rate constant will be the best way to select that winner.

That'll also let you decide if you want to place a premium on reliability. If the loan amount in this scenario is $300k, the difference between A and B is $534 (0.433% - 0.255% multiplied by loan amount) plus any difference in fees appearing in Box A of your Loan Estimates. 

In that case, you could objectively look and say "Ya know what, Lender A is $534 more expensive but she appears to know her business so I'm going to go with her and happily pay that reliability premium to ensure that I get this house that is a smoking hot deal that's going to benefit me financially for decades to come," or maybe it's "ya know what, having spoken to both people, I've got to say that both appear to be complete freaking dumbasses, so I'll just take the cheaper dumbass and hope for the best." 

Either way you've got to make the call, but this is the best way to have the information needed to make it.