How do you shop to for a good rate on a residential loan???

[Chris Johnson]

Hello BP community,

I am a new BP member from Orange County CA, and need to refinance the loan on my current property in order to start my REI journey. I have heard that to refinance you need to "shop for a good rate."

Is there a process one should use to shop for a good rate?  Or is there questions I should use to screen potential lenders? 

Appreciate your constructive feedback!

Thanks, Chris

[Stephanie Medellin]

@Chris Johnson  In order to "shop for a good rate" you will need a few key pieces of information.  You will need:

• An accurate middle credit score (credit report pulled by a lender and not obtained from a free website like credit karma)
• Loan Amount
• Estimated Property Value
• Property Type
• Occupancy - Is this a primary residence, second home or investment property?
• Purpose of Loan - Purchase vs. Refinance (i.e. are you taking cash out?)
• Type of Loan (15 year? 30 year?) and Fixed or Adjustable Rate

This type of quote will give you a very general idea of which lenders will have the best rates.

The most important thing to remember is that these rates will not be binding until you are locked in, and the rates will change from day to day.  If you compare several lenders on the same day, you will get an accurate comparison.  If you compare lenders on different days, you will not know whose rates are better or worse because the market changes from day to day.

Not only should you ask the interest rate but also the points/fees or lender credit associated with that rate.