Are you looking for a mortgage and wondering, “How many lenders should I apply to for a mortgage?” As the trusted mortgage broker in Houston, Champions Mortgage offers the following advice about applying to multiple lenders. The key takeaways include the pros and cons of doing so and tips for finding the best deal for your mortgage.
The Benefits of Applying to Multiple Lenders
If you’re shopping for a mortgage, many experts suggest applying to at least three lenders. Many encourage applying to up to five to ensure you get the best results.
Better Communication
Not every mortgage lender communicates well, so by applying to various lenders, you can prioritize the ones that have the best communication and respond quickly to your questions and concerns. Buying a house often feels overwhelming and requires processing a lot of information in a short amount of time. By choosing a lender that speaks clearly, honestly, and frequently, you empower yourself to make the best decisions.
Negotiating Power
By obtaining rates from multiple lenders, you can usually use the comparisons to help you negotiate a better rate. For example if one mortgage lender has better communication but slightly higher interest rates, you can often use the lower interest rates from its competitor as a bargaining tool.
Low Rates
The best benefit of comparing multiple lenders is you can find the most advantageous combination of low interest rates, fees, and other costs to help you find a mortgage you can afford. Without such a detailed comparison, you might miss out on a better deal.
Challenges With Multiple Applications
If you’re wondering, “How many lenders should I apply to for a mortgage,” consider some of the downsides of applying to multiple lenders.
Credit Score Issues
Applying for a mortgage can adversely affect your credit score. If you’re applying to more than one or two, consider the effect it might have and whether the lenders you’re applying to perform a hard credit check.
Application Fees
Not every mortgage application has a fee, but if you find enough that do, you may experience a significant increase in your expenses. These can cost up to $500 each, so prioritize the ones that either reduce the fee or don’t have one.
Increased Spam
Online lenders in particular will send up spam emails or texts after you apply. By filling out multiple applications, you’re increasing the frequency with which you’ll have to block phone numbers or emails. However, it’s a small price to pay for better rates.
Tips for Applying for a Mortgage
When you’re choosing a mortgage lender, whether you’re applying to a bank or credit union, use these tips to find the best deal.
Examine All Fees
Low interest rates are only part of the equation you must consider. Factor in the following as well:
- Fees for applying, underwriting, and processing
- Fixed vs. flexible rates
- An annual percentage rate
Monitor Credit
Always check your credit report before applying for a mortgage, and avoid applying for new lines of credit during the process. Confirm you have all the correct information in your account and report problems immediately.
Apply for Advanced Approval
Receiving pre-approval helps you determine your housing budget and prevents you from looking at and becoming attached to houses out of your price range.
Let Us Help You Apply for Mortgages Today
If you’re wondering, “How many lenders should I apply to for a mortgage,” Champions Mortgage can help. From helping you understand what do mortgage lenders look at to helping you know how to waive the Consumer Financial Protection Bureau (CFPB) requirements, they have all the answers.
To learn what we can do for you, speak with a team member by calling (281) 727-2500 today.
