How do I know whether I’m getting a competitive mortgage for my East Bay home?

Start with the person advising you, then give them time to prepare your loan. A competitive mortgage can begin months before someone quotes the rate.

A good mortgage broker understands which lenders specialize in your type of loan. Bank of America offers its own loans; it is not shopping Wells Fargo for you. Both are large banks, but they do not necessarily specialize in the same loan market. A broker can compare several lenders and explain which fit your circumstances.

Preparation can change the comparison

If you expect to buy in six months, have the conversation now. Two buyers with the same 800 credit score can still need different strategies.

Would paying down a particular credit card improve your position? Would paying off a car loan reduce monthly obligations? Could keeping more cash and choosing a different down payment work better? Which income or asset documents will take time to prepare?

Have the mortgage professional calculate the alternatives before you move money or pay off debts. Ask them to show what each step could change in your qualification, loan pricing and cash available after closing. You want a plan for your actual file.

Find out what the quoted rate costs

A client thought his bank was offering a “two-point discount.” The proposal required $30,000 upfront on a $1.5 million loan to obtain that rate.

One discount point equals 1% of the loan amount. It is a cost paid for a lower rate, not a free discount and not necessarily a one-percentage-point reduction in the rate.

Ask for options with and without points. How much would you save each month? How long would it take to recover the upfront expense? How long do you realistically expect to keep this mortgage?

Put the competing offers side by side

Compare Loan Estimates for the same loan amount and type, obtained close together in time. Check the rate, points, lender charges, credits and cash needed to close. Confirm whether the rate is locked and for how long.

Also ask what remains before final approval. A reassuring conversation and a preapproval letter are not the same as a fully resolved loan.

A beautiful bank building can inspire confidence. The better reason to trust someone is that they understand your situation, help you prepare and explain the numbers before you commit.

Preparing to buy in the East Bay? Speak with Alessandra about coordinating your home search with an informed financing plan.

Sources

• Consumer Financial Protection Bureau — Lender credits and discount points
• Consumer Financial Protection Bureau — Request and review multiple Loan Estimates
• Consumer Financial Protection Bureau — Get a preapproval letter

Meet Alessandra Imanabadi
Co-Founder, Real Estate Advisor, Licensed Real Estate Broker

With more than 23 years of real estate experience serving the Bay Area and over $250M in negotiated and completed transactions, I bring local knowledge, careful analysis and experienced guidance to buyers and sellers throughout the Bay Area.

DRE #01390368 · NMLS #328245

Direct (510) 504-2528
NationwideFineHomes.com

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