Would you believe it if a loan officer told you “there’s really not much to compare” and therefore you should take her loan without first seeing an estimate?
That’s what happened to a home buyer named Nicole recently. She and her husband wanted to buy a house in the country, so she called a local lender and asked for an upfront cost estimate for a USDA loan.
Much to her surprise, the loan officer tried to dissuade her from looking at the price tag. The loan officer wanted her to proceed sight unseen — without seeing the lender fees, possible junk fees, appraisal cost, credit report fee, escrow closing fee, title insurance fee, recording fee, or interest rate and monthly payment.
“The lender doesn’t control the fees, so there’s not much to compare,” crooned the loan officer.
Wisely, Nicole sent me an email and asked, “Is this true?”
My answer was a big NO, it is not true. It is the home owner’s right and responsibility to look at the fees before deciding whether or not to make a full application, including getting the credit report pulled and sending in all your financial documents.
Never fall prey to a loan officer who refuses to disclose their fees upfront.
Ask for a cost estimate or estimate worksheet. This is the new upfront Good Faith Estimate, thanks to lending laws passed by federal government. What used to be a GFE is now called a cost estimate, initial fees worksheet, or estimate worksheet. It contains all the figures you need to compare loans and decide which lender offers the best pricing.
Never commit to a bank, direct lender, broker, or credit union without comparing two or three cost estimates first. No exceptions.
For more information on this topic, including the mortgage industry’s dirty little secrets on getting rich at your expense, please see Mortgage Rip-Offs and Money Savers. Find out what lenders don’t want you to know, how to shop and compare, what to say and how to say it. Save yourself stress, regret, and thousands of dollars on your home financing.