Loan Estimate Comparison
Loan Estimate Comparison! This will help you compare loan estimates, formerly call “good faith” estimates. Now we call them loan estimates.
Loan Estimate Comparison – What does the Loan Estimate show?
The loan estimate will show what the consumer is usually looking for with the interest rate and all of the closing costs. It will show you the loan term, that it’s a purchase, it’s a fixed rate, it’s a conventional loan, all the basics. You’ll see the loan amount, of course, the interest rate, the monthly payment. This is the principal and interest payment or the mortgage payment, not the complete payment with taxes and insurance. You’ll see that breakdown here, principal and interest. This loan happens to have mortgage insurance, property taxes and home owner’s insurance. And the estimate for the total payment.
Then as you go down, what you really want to look for are over here under Loan Costs. Origination charges, these are the application fees that the lender will charge. Services you cannot shop for, credit reports, flood certification, that’s it.
Loan Estimate Comparison – How do I compare with other lenders?
There’s really only a couple of things that you’re going to want to look at and analyze when comparing loan estimates. You’ve got all these other fees that we have no say in. We’re only estimating them. And I’ve had clients that will say, “Oh, Brian, I’m going to use the other lender I’m comparing, they’ve got lower transfer taxes.”
They may have mis-estimated and maybe are not accurately estimating the transfer taxes.
I’ve had people say, “Well, I’m going to go with another lender, because they’ve got lower property taxes.” Well, we don’t control the property taxes. The property tax monthly amount and the property tax, the number of months that will be collected, are fixed. It is what it is, we don’t control it.
So to compare lenders, ignore everything else. Strictly look at three things. The interest rate, the application fees, and then any other minor fees, they call them services you can shop for, is usually going to be a credit report and a flood certification. The appraisal fee is not even controlled by us, it’s a pass-through fee, third-party fee that we collect for the appraisal management company.
So don’t be confused when you look at these forms. Look strictly at the lender fees, seen here, and the interest rate.