Buying a House in North Oaks? Be a Savvy Loan Shopper

Posted by Kris Lindahl on Wednesday, October 21st, 2015 at 11:48am.

Sure it’s more exciting to look at homes for sale in North Oaks when you make the decision to buy, but it’s not the first step. Nope. That would be securing a loan so you know how much you can spend on a home.

First-time buyers, especially, find the lending process confusing and for good reason ― it IS confusing. So today I thought we’d take a look at the very first step in the home purchase process, finding the right lender.

Don’t Buy into the Myth

I don’t know if it’s a “myth,” so much as a misconception among consumers that the best loan is the one with the lowest interest rate. This may not necessarily be the case, and here’s why.

The lender’s advertised rates may not be for the loan you want. For instance, you may want a 30-year fixed rate and the advertised rate may be for a 15-year loan or for an adjustable rate loan.

The rate advertised may not represent the true APR, which may be a lot higher.

Always compare a lender’s Annual Percentage Rate and not the advertised rate because this reflects the rate with points and fees included.

Shop Local

Start with local banks and credit unions when you begin the lender hunt. In fact, start with the institution where you currently bank. Use their offer to compare against everyone else you speak with.

The best source of finding the “everyone else?” A mortgage broker will shop from among a group of lenders and products.

How to Compare Offers

Ask each lender for their current rates and whether or not these represent the day’s lowest or the week’s and, most significantly, if the rates are for fixed or adjustable loans. Whether you are pursuing a fixed rate or an adjustable rate loan, you want to compare apples to apples.

For adjustable rate quotes, ask when the interest rate will increase and how the payments will vary. Also find out if your payment will drop if rates do.

Finally, ask the lender to translate the points into a dollar amount. This makes it so much easier to figure out how much you’ll be paying for the loan and to compare it to other quotes.


Need to sell your home?  Find out what it is worth.

Leave a Comment