First time buyer - help me understand how to “shop” for the best mortgage rate

[Anonymous]

The regs are set up up to encourage competition. Ask three different lenders for a Hud-1. The Hud-1 allows a side by side comparison showing rates and closing costs. And make sure at least one of of your three bids is a broker who has access to multiple source of funding. Good luck!

[Anonymous]

Anonymous wrote:We never shopped for lenders. We found a broker we were comfortable with who gave us a rate we were happy with. Maybe we could have saved some money if we had shopped around. Who knows. But we now have a good relationship with our lender. She is helping us be competitive for a second home purchase we are trying to make as well.

It seems like you’re pretty happy giving money away.

[Anonymous]

Thanks for all the responses. I appreciate it. Two follow up questions.

What is a hud-1?

Does everyone agree that the right time in the process to “shop” around is after the buyer is under contract on a house? Or should I be doing this shopping right now when I am getting my preapproval? The timing piece on this is throwing me.

[Anonymous]

OP, you might want to take a first time homebuyers class. I did and it was so helpful. You need to go into this process with as much information as possible.

[Anonymous]

Anonymous wrote:Thanks for all the responses. I appreciate it. Two follow up questions.

What is a hud-1?

Does everyone agree that the right time in the process to “shop” around is after the buyer is under contract on a house? Or should I be doing this shopping right now when I am getting my preapproval? The timing piece on this is throwing me.

Yes, but you need to have your contacts ready. Time flies once you start the process.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Thanks for all the responses. I appreciate it. Two follow up questions.

What is a hud-1?

Does everyone agree that the right time in the process to “shop” around is after the buyer is under contract on a house? Or should I be doing this shopping right now when I am getting my preapproval? The timing piece on this is throwing me.

Yes, but you need to have your contacts ready. Time flies once you start the process.

You do the bargaining once your offer has been accepted. Rates change daily, and different lenders offer different things. When you get your quotes, you tell them your financial information and make sure they can close you on time. At some point you may find a better rate, but can’t close on time, at which point you would have to renegotiate the contract terms.

[Anonymous]

I used a broker to close on a house in 12 days during Covid. He handled most of the work with the lender to achieve that.

[Anonymous]

Have all paperwork ready. Every single financial document you can imagine, they will ask for.

[Anonymous]

Anonymous wrote:OP, you might want to take a first time homebuyers class. I did and it was so helpful. You need to go into this process with as much information as possible.

Where did you take a class through? I’ve listened to a lot of podcasts and done a fair bit of reading but am open to more buyer education.

[Anonymous]

Your lender is required to give you a HUD-1 as a disclosure about your financing before you agree to a loan. The point is to allow you to understand and compare.

I am struck that this forum does not talk about this...

[Anonymous]

Shop for a loan before you have a property. Your loan is based upon you more than your property.

[Anonymous]

OP here. I just did some research and unless I am missing something from what I can tell a HUD 1 is only provided if you got a loan prior to 2015 or if you’re applying for a reverse mortgage. It says for mortgages now you’re required to get something called a closing disclosure 3 days prior to closing - which is an update to the information that should have been provided to you in the loan estimate document that you should have received 3 business days after you apply for a mortgage.

https://www.consumerfinance.gov/ask-cfpb/what-is-a-hud-1-settlement-statement-en-178/