Mortgage Rates
Refinance Rates
FHA Rates
VA Rates
Jumbo Rates
Adjustable Rate Mortgage Rates
Interest Only Mortgage Rates
Non-Owner Occupied Rates
Home Equity Loan Rates
How to Compare Mortgage Proposals and Select the Right One for You

How to Compare Mortgage Proposals and Select the Right One for You

  • Shopping for a Mortgage
  • You should treat the mortgage process like you would any other major purchase, such as buying a car.  Shop around, compare proposals from multiple lenders and select the one with the best loan terms, which usually means the lowest combination of mortgage rate and closing costs.  We recommend that you contact at least five lenders when comparing proposals as the more lenders you shop, the more likely you are to find the lender and mortgage that are right for you.  A recent study showed that borrowers that compared at least five mortgage quotes saved an average of $3,000 on their loan as compared to borrowers that compared two lenders, who saved an average of only $1,400.  In short, the more lenders you compare, the more money you save on your mortgage. 

    It takes extra time to review mortgage proposals and negotiate with lenders but spending an extra hour or two can save you thousands of dollars. For example, on a $300,000 30 year loan, reducing your mortgage rate by just 0.125% saves you almost $8,000 in interest expense over the life of your loan.  Follow the steps below to negotiate the best terms for your mortgage:

    • Gather mortgage proposals from at least five lenders, including one mortgage broker.  There are different types of lenders such as big, regional or local banks, mortgage brokers, mortgage bankers and credit unions and they are ALL competing for your mortgage business.  Some mortgage lenders such as banks, mortgage bankers and credit unions are direct lenders, which means they lend you money directly for your mortgage, potentially allowing them to offer you a lower interest rate.  Other lenders such as mortgage brokers do not fund mortgages directly but instead act as a personal mortgage shopper for borrowers and compare rates and fees from multiple funding lenders to find you the best loan terms, so you benefit from lender competition.  Gathering proposals from at least five lenders including multiple types of lenders ensures that you have a range of options, which puts you in a stronger position when you negotiate your mortgage.
    • Request a Loan Estimate, written quote or Lender Fees Worksheet from the lenders you contact.  When you contact lenders request a Loan Estimate, written quote or Lender Fees Worksheet that outlines the key items in their mortgage proposal.  Borrowers should use the mortgage rate and closing cost information presented in these documents to compare mortgage proposals and select a lender.  Lenders should ask you questions regarding your personal and financial profile as well as the details of your home purchase so that they can provide the most accurate proposal possible.  When you contact lenders ask that they not pull your credit report as this can negatively impact your credit score.  They can use summary credit information to provide you a Loan Estimate, mortgage quote or Lender Fees Worksheet.  Please note that lenders cannot charge you for a Loan Estimate, written quote or Lender Fees Worksheet.  
    • Loan Estimate.  The Loan Estimate outlines a good faith estimate of the key terms of the mortgage including interest rate, Annual Percentage Rate (APR), closing costs and mortgage features including rate lock period. Lenders are legally required to provide a Loan Estimate within three business days of a borrower submitting a loan application but some lenders may provide a preliminary Loan Estimate without submitting an application. The Loan Estimate is a standard document that is the same across all lenders which makes it easier to compare mortgage proposals.
    • Written Mortgage Quote.  In some cases the lender may not provide a Loan Estimate so borrowers should request a written mortgage quote, usually via email, including mortgage rate, closing costs and rate lock period. A written mortgage quote is not an official document so it does not carry the same weight as the Loan Estimate but it should allow borrowers to quickly compare mortgage proposals.
    • Lender Fees Worksheet.  Borrower should also request a Lender Fees Worksheet that provides a detailed breakdown of all the costs and expenses associated with a mortgage including fees charged by lenders and other third parties. The lender is not required to provide you with the worksheet by law, but will likely provide it to you if you ask.
    • Compare mortgage proposals.  When comparing mortgage proposals, we recommend that you focus on two key items that have the most impact on your upfront and long-term mortgage costs: 1) mortgage rate, and 2) closing costs. You can use the Loan Estimate, written mortgage quote  or Lender Fees Worksheet to help with the comparison.  If you are using a Loan Estimate, you can find the interest rate at the top of page one and the estimated closing costs at the bottom of page one.  Page two provides a detailed, item-by-item breakdown of the all the mortgage closing cost items you are required to pay.  You should also use the Annual Percentage Rate (APR) on the top of page three of the Loan Estimate to quickly compare and identify excessive closing costs.  In short, the APR represents what your interest rate would be if it included all upfront lender and closing costs so it is a way to use one figure to compare both the mortgage rate and closing costs.  If the APR is much higher than your mortgage rate then you know that the closing costs are relatively high and you should negotiate lower costs or select a different lender.  Additionally, if you have proposals from two lenders that are offering the same mortgage rate but one APR is lower than the other, then you know the lender with the lower APR is charging lower closing costs.  The table at the bottom of the page shows you exactly where on the Loan Estimate you can find the mortgage rate, closing costs and APR.
    • Use our MORTGAGE COMPARISON CALCULATOR to compare loans with different rates and closing costs
    • Negotiate the best terms.  Some lenders may offer a lower mortgage rate with higher fees while other lenders may offer a higher rate with lower fees.  Use this information to your advantage to negotiate the lowest mortgage rate and closing for your loan by seeing if a lender is willing to match the terms offered by another lender.  Additionally, you can use the Lender Fees Worksheet to perform a more detailed review and comparison of mortgage closing costs. For example, one lender may charge an origination fee of $1,200 while another lender may only charge $995.  Borrowers should use the Lender Fees Worksheet to negotiate specific expenses and reduce your overall closing costs.  Comparing mortgage proposals from multiple lenders and doing a little negotiating should enable you to find the mortgage with the lowest mortgage rate and fees, which can save you thousands of dollars. 

    When you compare mortgage proposals keep in mind that interest rates and closing costs vary by mortgage program and length. For example, a fixed rate mortgage typically has a higher interest rate than an adjustable rate mortgage.  In some cases borrowers consider different types and lengths of mortgages so be sure you are comparing similar programs when you select your lender and loan.  Additionally, make sure the cost items, including discount points which you may choose to pay to lower your mortgage rate, are the same across all lenders so it is easier to compare proposals. 

  • Great Mortgage IdeaSelect from lenders below or click MORTGAGE RATES to compare multiple mortgage proposals
  • Rate Details*
    Loan Program:  
    Monthly Payment:  
    Points  More Info:
    Points: Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
    Total Lender Fees:  
    Loan type:  
    Property Value:  
    Loan to Value:  
    Credit Rating:  
    Date Submitted:  
    Monthly Housing Payments
    P & I More Info
    Principal & Interest: A periodic payment, usually paid monthly, that includes the interest charges for the period plus an amount applied to the reduction of the principal balance.
    Mortgage Insurance More Info
    Mortgage Insurance: The monthly cost for a policy that protects the lender in case you’re unable to repay the full amount of the loan. It is typically required for loans that have a loan-to-value ratio between 80% to 100%.
    Property Tax More Info
    Property Tax: (Also called "Real Estate Tax.") Property taxes are government assessments on real estate property. With mortgage financing, the local, county or state tax assessment on real estate property is considered part of the monthly housing obligation and typically collected and set aside by the lender ...
    Homeowner Insurance More Info
    Homeowner Insurance: or also commonly called hazard insurance, is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.lender ...
    Homeowner Association Fee More Info
    Homeowner Association fee: (HOA) fees are funds that are collected from homeowners in a condominium complex to obtain the income needed to pay (typically) for master insurance, exterior and interior (as appropriate) maintenance, landscaping, water, sewer, and garbage costs.
    (If Any)
    Total Monthly Housing Payments
    Lender Fees
    Points More Info
    Points Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
    Origination Fee More Info
    Origination Charge: A loan origination charge is a fee charged by the lender for evaluating, processing, and closing the loan.
    Credit Report Fee More Info
    Credit Report Fee: Fee charged to obtain an applicant’s credit history prepared by one or all of the three major credit bureaus. Used by lender to determine the borrower’s creditworthiness.
    Tax Service Fee More Info
    Tax Service Fee: A fee charged by the lender to cover the cost of retaining a tax service agency. These agencies monitor the property tax payments on the property and report the results to the lender.
    Processing Fee More Info
    Processing Fee: A processing fee is a charge by the lender for clerical items associated with the loan. Examples of processing include loan set up, organization of loan conditions for underwriting, and preparing required disclosures for the borrower.
    Underwriting Fee More Info
    Underwriting Fee: A fee charged by the lender to verify information on the loan application, authenticate the property’s value, and perform a risk analysis on the overall loan package.
    Wire Transfer Fee More Info
    Wire Transfer Fee: In most cases lenders wire funds to escrow companies to fund a loan. Commercial banks that perform this function will charge the lender so the fee is generally passed on to the borrower.
    (If Any)
    FHA Upfront Premium More Info
    FHA Upfront Premium: A fee paid in cash at the close of escrow or more commonly it is financed into the loan. These premiums are pooled together by the FHA and are used to insure the risk of borrower default on FHA loans. FHA upfront premiums are prorated over a five year period, meaning should the homeowner refinance or sell during the first five years of the loan, they are entitled to a partial refund of the FHA upfront premium paid at loan inception.
    (If any)
    VA funding Fee (If any)
    Flood Fee
    Other Fees More Info

    Other fees could be either additional Administrative Fees that a lender charges or it could be a Flat Fee to cover all lender charges such as: (Origination Fees, Points, Underwriting and Processing Fees, Credit Reports and Tax Service Fees)

    The flat fee does not include prepaid items and third party costs such as appraisal fees, recording fees, prepaid interest, property & transfer taxes, homeowners insurance, borrower’s attorney’s fees, private mortgage insurance premiums (if applicable), survey costs, title insurance and related services.

    Total Lender Fees
    *Actual rates and other information may vary. Sponsored results shown only include participating lenders. The information you enter on this page will only be shared with lenders you choose to contact, either by calling the phone number or requesting a quote.
    Current Mortgage Rates as of November 21, 2018
    • Lender
    • APR
    • Loan Type
    • Rate
    • Payment
    • Fees
    • Contact
    Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Click here for more information on rates and product details.
  • Where to Find Information to Compare Mortgage Proposals
  • The table below shows you where on the Loan Estimate you can find 1) the interest rate, 2) estimated closing costs, and 3) the APR.  These are the most important items to review when you review mortgage proposals.  Your interest rate determines your monthly payment and total interest over the life of your mortgage.  Closing costs are the fees you pay when your loan closes and can run thousands of dollars for most mortgages.  The APR is basically away to look at your combined interest rate and closing costs using one figure.  Comparing these figures for multiple proposals helps you select the mortgage and lender that are right for you.  Click on the rectangle icons to see where each figure is located on the Loan Estimate.

  • Key mortgage costs items
    • Interest Rate
    Estimate (LE)
    • One of the first items on the LE and easy to compare across lenders because it is a single figure
    • Estimated Closing Costs
    Estimate (LE)
    • Total of all closing costs including lender, appraisal and title fees as well as any taxes, prepaids and escrow payments
    • Found at the bottom of page one of the LE
    • Annual Percentage Rate (APR)
    Estimate (LE)
    • The APR represents what your interest rate would be if it included all up-front lender and closing costs
    • Use the APR to compare mortgage proposals from multiple lenders
    • If you have proposals from two lenders that are offering the same interest rate but one APR is higher than the other, then you know the lender with the higher APR is charging higher closing costs
    • Found at the top of page three of the LE
  • Sources

    Compare Mortgages:

    Find the Best Mortgage:

About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry


Get Free Personalized Mortgage Quotes

First Name:
Last Name:
Phone Number:

My Mortgage Info

Mortgage Type
Credit Score
Loan Amount
Property Value
FREEandCLEAR.comThank you for submitting your information!
FREEandCLEAR.comYour mortgage quote request has been sent to our lending partners and you should receive emails from multiple lenders shortly
FREEandCLEAR.comComparing proposals from multiple lenders is the best way to save money on your mortgage!