Looking to Use the Information You Obtained Here to Shop Elsewhere? Read This First!

Shopping Off-Line

If you take the price you found on this site to a loan officer (LO) employee of a lender, or a mortgage broker who deals with multiple lenders, and ask them if they can beat it, invariably they will say “Yes”. This is called “low-balling the price.” It is a very common practice designed to snare the price shopper as a client.

Low-balling only arises when the LO or broker is the source of the price quote. In contrast, the prices you were quoted on this site came directly from each lender’s internal pricing system, without intervention by intermediaries. These “posted prices” are those at which the lender is actually prepared to commit at that time.

Low-balling the price does not commit the LO or broker to anything for which they can be held to account. Market prices change frequently and all lenders reset their posted prices every day, and sometimes within the day. These price changes make all prior price quotes obsolete.

A quoted price does not become a commitment by the lender until it is locked. In today’s market, lenders won’t lock a price until the borrower’s credentials have been checked and the application approved. This is true of the prices you were quoted on this site, as well as all the others. But there is this difference.

When you elect to proceed with the low-priced lender on this site, while the price will change with the market until it is locked, you are assured of receiving the lender’s posted price on the lock day. That is important, because you will have made a financial commitment in the transaction at that point, and if you are purchasing a house, you may not have the time to begin the process again with another lender.

In contrast, if you proceed with an LO or broker who low-balled the price to corral you, the likelihood is high that on the day you lock you will be high-balled – you will pay more than the posted price. The greater your financial commitment at that point and the closer you are to a purchase transaction date, the stronger the inducement to over-charge you when the price is locked.

Shopping On-Line

An alternative is to shop on line. There are thousands of single lender web sites, and a handful of multi-lender sites.

Trying to compare the prices of single-lender sites against each other is hopeless: every site is formatted differently, price adjustments are partial in a variety of different ways, some prices are current and some not, some sites show all lender fees while others don’t, and on and on.

Multi-lender sites are much more promising because they pull the prices of multiple lenders together at one place using one format. I recently evaluated 14 such sites including mine. Here are some highlights:

  • 11 of 14 multi-lender sites used posted prices but only this site and one other allowed users to confirm posted prices on the lock day.
  • Only 3 including this site showed real-time prices, which means that the prices shown on the others may be valid or they may be obsolete.
  • 6 sites including this one showed total lender charges, where the others showed only points.
  • This site was the only one of the 14 that adjusted prices for all transaction features that affect price. When price adjustments are not complete, the site always assumes the best, which means that you are vulnerable to an unpleasant surprise down the road.

For all the details, see How Effectively Can You Shop at Multi-Lender Web Sites?

Want to shop for a mortgage on a level playing field?

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  1. Receive His Help in Finding the Type of Mortgage That Best Meets Your Needs
  2. Shop Prices Posted Directly by His Certified Lenders
  3. Shop Prices Fully Adjusted to Your Deal
  4. Shop Prices That Are Always Current
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