Quick Answer
Collect 3–5 Loan Estimates on the same day and compare APR, points, and lender fees—not just the rate. Ask about lock length (30–120 days), extension costs, and float-down options. Batch applications within a short window so credit pulls count as one inquiry for scoring.
Rate vs. APR vs. points (what really moves cost)
| Term | Definition | What It Tells You |
|---|---|---|
| Interest Rate | Base rate charged on loan balance | Monthly payment calculation |
| APR | Rate + fees expressed annually | True cost of loan for comparison |
| Points | 1 point = 1% of loan amount upfront | Usually buys 0.125–0.25% lower rate |
Example: Why APR Matters
Lender A: 6.00% rate, $2,000 fees, 6.15% APR
Lender B: 6.25% rate, $500 fees, 6.28% APR
Better deal: Lender A (lower APR despite higher rate)
*Assuming you keep the loan for full term. If paying off early, lower fees matter more.
Read the Loan Estimate / Cost of Borrowing disclosure
Key sections to compare (page 1):
- Loan amount – Make sure all quotes are for same amount
- Interest rate – What you'll pay monthly
- Monthly P&I – Principal and interest payment
- APR – True cost for comparison
Key sections to compare (page 2):
Section A: Origination Charges
- Origination fee (%)
- Points (discount points)
- Processing, underwriting fees
Section B: Third-Party Services
- Appraisal, credit report
- Title insurance, attorney fees
- Survey, pest inspection
Lock periods, extensions, float-down
Standard lock periods:
- 30 days: Quick closings, often free
- 45-60 days: Most common, small fee or rate increase
- 90-120 days: New construction, costs 0.125–0.50% more
Lock Options to Ask About
- Float-down: Capture lower rates if they drop during lock period
- Lock extensions: Cost if closing is delayed (usually 0.125–0.25% per 15 days)
- Free re-lock: Some lenders offer if rate drops significantly
- Construction-to-perm: Extended locks for new builds
Timing & credit impacts (rate-shopping window)
Credit score protection:
- All mortgage inquiries within 14–45 days count as single inquiry
- Shop all lenders within this window to minimize credit impact
- Don't apply for other credit during house-hunting period
- Each hard pull may lower score 2–5 points temporarily
Best timing strategy:
- Research lenders online first (no credit pulls)
- Pick 3–5 lenders to get official Loan Estimates
- Apply to all within 48 hours on same business day
- Compare offers and negotiate
- Lock rate with chosen lender
Negotiating: match/beat quotes, lender credits
Negotiation Tactics
- Rate matching: Ask if they'll match competitor's rate/fees
- Lender credits: Trade higher rate for reduced closing costs
- Fee waivers: Application, processing, or underwriting fees
- Appraisal waivers: Some loans qualify for automated valuation
- Bulk discounts: If buying multiple properties or high loan amount
What to say: "Lender X offered me [specific rate/terms]. Can you match or beat that?"
Types of lenders to consider
Big Banks
- Pros: One-stop shopping, branch access
- Cons: Often higher rates, slower service
- Best for: Existing customers, complex situations
Credit Unions
- Pros: Lower rates, member focus
- Cons: Membership required, limited programs
- Best for: Members, straightforward loans
Online Lenders
- Pros: Competitive rates, fast process
- Cons: No in-person service
- Best for: Tech-savvy, rate shoppers
Frequently Asked Questions
Does locking a rate cost money?
Most 30-60 day locks are free. Longer locks (90+ days) often cost 0.125-0.50% of loan amount or add to rate.
Can I switch lenders after locking?
Yes, but you lose your rate lock and pay application fees again. Only switch if you find significantly better terms.
What if rates drop after I lock?
Ask about float-down provisions upfront. Some lenders offer one-time re-lock if rates drop 0.25%+ during lock period.