Compare three and seven years
Our worked example tracks interest, upfront charges and the remaining balance. See why paying points can change which option looks better at different horizons.
Explore the worked quote comparison →How to compare mortgage quotes without getting lost in the numbers.
Give each lender the same loan amount, down payment, loan type, term, occupancy and property details. Compare written offers from the same day with matching lock periods. Review the interest rate, APR, points, lender fees, credits and cash to close, then test costs over the years you expect to keep the loan.
How do I shop for a mortgage step by step?
Start with a repeatable scenario, compare the whole cost, and keep control of the decision.
- Set your comfortable budget
Include taxes, insurance, mortgage insurance, association dues and reserves after closing. Your approval ceiling is not necessarily your comfortable payment.
- Prepare one scenario
Write down the property state and county, price, down payment, credit estimate, occupancy, loan amount, product and term. Tell each lender about any unusual income or property details.
- Request comparable written offers
Try three providers as a starting point. Ask for pricing on the same day with the same lock period. Identify the actual lender behind a broker quote.
- Separate price from estimates
Compare points, origination charges and credits first. Then align taxes, insurance, third-party services and prepaid days so placeholders do not decide the winner.
- Test your expected holding period
Compare the cash you pay, interest, mortgage insurance and remaining balance if you keep the loan for three, five or seven years. A lower payment alone can be misleading.
- Confirm before you commit
Review the official disclosures, lock expiration, extension costs and closing schedule. Ask for changes in writing, and verify wire instructions through a known phone number.
Further reading: CFPB’s comparison process and FTC’s mortgage-shopping guidance.
How do I compare Loan Estimates line by line?
Confirm that the loan terms match, then distinguish financing charges from property expenses and money held for future bills.
| Where to look | Compare | Ask the next question |
|---|---|---|
| Page 1 · Loan terms | Loan amount, term, product, note rate, lock status | Check for an adjustable rate, balloon payment or prepayment penalty. |
| Page 1 · Projected payments | Principal and interest, mortgage insurance, escrow | A lower tax or insurance placeholder does not mean cheaper financing. |
| Page 2 · A, B and C | Origination, required services and services you can shop for | Compare totals and ask about overlapping charges; request the provider list. |
| Page 2 · E, F, G and H | Government charges, prepaids, initial escrow and other costs | Align closing date and property assumptions; distinguish transaction costs from reserves. |
| Page 2 · J and cash to close | Lender credits, total closing costs and cash calculation | Account for deposits and seller credits; low cash to close may mean costs are financed. |
| Page 3 · Comparisons | Five-year figures, APR and total interest percentage | Use the same loan structure; calculate another horizon if five years does not fit your plans. |
CFPB’s interactive Loan Estimate explainer. The lender’s disclosure controls; a marketplace quote or worksheet is not an official Loan Estimate.
How do brokers, direct lenders and marketplaces compare?
Compare the offer and the service process; no provider category guarantees the lowest cost.
| Option | What it does | What to ask |
|---|---|---|
| Direct lender | Originates loans through its own lending operation. | Which products fit my case, and what are the total fees? |
| Mortgage broker | Connects borrowers with lenders available through its network. | Which lender is behind this quote, and how does compensation affect the terms? |
| Online marketplace | Helps shoppers discover or compare participating providers. | Who receives my information, how are results ordered, and is participation limited? |
FTC: mortgage brokers and shopping · SLR’s comparison methodology · Advertising and independence.
What does a lower rate actually save?
It depends on the fees and how long you keep the loan. A fictional example can show the method without presenting a sample rate as an offer.
Try points versus credits
Change the inputs yourself and compare the upfront amount with the monthly payment difference. Keep enough cash for closing and reserves.
Open the points calculator →Use your property state
Check county loan limits and official housing-agency resources before assuming two loans use the same program.
Explore all 50 state guides →We do not publish a measured SLR savings average or quote-spread statistic here. The examples are fictional; the Freddie Mac research cited below is historical research, not a report of SLR outcomes.
Answers to common mortgage-shopping questions
How do I compare mortgage quotes?
Give each lender the same loan amount, down payment, loan type, term, occupancy and property details. Compare written offers from the same day with matching lock periods. Review the interest rate, APR, points, lender fees, credits and cash to close, then test costs over the years you expect to keep the loan.
What is a Loan Estimate, and when should I receive one?
A Loan Estimate is the standardized three-page disclosure for most closed-end home mortgages. A lender generally must provide it within three business days after receiving the six application items: name, income, Social Security number, property address, estimated property value and requested loan amount. It is not an approval. A planning quote is different; HELOCs use different disclosures. Send sensitive application information only through your chosen lender’s secure process.
Should I compare the interest rate or APR?
Compare both. The note rate determines interest on the loan balance; APR incorporates certain borrowing charges into an annualized measure. APR is not cash to close and does not show your exact cost if you sell or refinance early. Compare matching loan structures, then examine fees and your holding period. An ARM’s APR does not show its maximum possible rate.
Is a mortgage broker, direct lender or marketplace better?
None is automatically cheapest. A direct lender offers its own lending options. A broker works with lenders in its network, which is not the whole market. A marketplace helps you discover or compare participating professionals. Ask who funds the loan, which options were considered and how compensation appears in your costs. Compare actual written terms, not the business label.
Why do lenders quote different rates on the same day?
Different lenders price the same risk differently, and quotes may also hide differences in points, credits, loan details or lock periods. Freddie Mac research documents rate variation among similar applications submitted on the same day. Before deciding one lender is cheaper, have both reprice the identical scenario and explain every fee or assumption that differs.
How many lenders should I compare?
Three comparable written offers is a practical starting point, not a legal requirement or a guarantee of the best deal. Add another if the costs differ materially or you need a different program. Confirm that multiple brokers are not simply showing the same underlying lender. On SLR, request availability depends on eligible participating originators in your property state.
How much can shopping around save?
There is no guaranteed savings amount. Freddie Mac’s February 2023 research simulated potential annual savings of up to $600 from two quotes and more than $1,200 from at least four during October–November 2022. Its sample used specific conventional purchase-loan profiles; those historical results are not today’s rates or SLR customer outcomes. Your comparison must include fees and how long you keep the loan.
What do mortgage points and lender credits really cost?
One point is 1% of the loan amount: $4,000 on a $400,000 mortgage. Points buy a rate reduction; lender credits generally offset upfront costs in exchange for a higher rate. Ask for zero-point, points and credit alternatives using the same lock. A “no-cost” loan can still cost more through interest or a larger balance.
Does shopping for a mortgage hurt my credit?
A hard credit inquiry can affect your score; a soft inquiry does not affect FICO scores. FICO groups qualifying mortgage-shopping inquiries within a window that varies by model: 14 days for older versions and 45 for newer versions. A focused 14-day shopping period is a conservative approach. Ask which type of inquiry is needed before authorizing it. Separate inquiries can still appear on the report.
How can I compare quotes without unwanted sales calls?
Start with public calculators and read the sharing consent before submitting a form. Ask who receives your information, whether it is sold or sent to additional companies, and how to stop contact. SLR’s initial private scenario keeps entered contact details separate from originators; you choose whether to connect. That does not control contact from unrelated websites or your existing relationships.
What changes when I shop in a different state?
County loan limits, assistance programs and property-related costs can differ. Check the property’s actual county, unit count, tax assumptions and insurance needs before comparing offers. A state page is educational coverage, not a promise that SLR has a participating originator there. Use the state guides below to find official local sources.
What are current mortgage rates, and should I lock?
Use the dated market dashboard for national context, then request pricing for your own scenario. A survey average is not an available offer. Ask your lender for a written lock expiration, extension charges and any float-down terms. Choose based on your closing deadline and ability to absorb a higher payment; no forecast guarantees a better rate later.
Can I negotiate a mortgage quote?
You can ask a lender to improve a written offer. Share a comparable competing quote and ask for a revised rate, points and total lender charges. Verify that a concession in one line was not moved into another. Keep taxes, insurance and closing dates consistent so that a smaller estimate is not mistaken for a real price reduction.