How to Shop for A Mortgage to Obtain The Best Rates

Owning your own residence is something to take pride in. You are building equity in a house or condominium you can call your own, as well as providing your family with a place to enjoy and truly call home.

If you have considered purchasing a new place or even a vacation home, you will need to prepare for an application process. Then, you’ll want to know how to shop for a mortgage so you obtain the best interest rate, loan term, and relationship with a lender.

Ultimately, the mortgage lender you choose comes down to receiving the best value. After all, your home is an investment and you should receive the best deal available.

To make the financing and purchasing process easier, the home loan professionals at have compiled a list of tips for your mortgage shopping experience. You deserve a great rate with first-class service and purchasing a home is one of the biggest investments you’ll ever make, so we’ve also included some guidance on what to look for when shopping for mortgage rates from lenders.

Getting Started with Shopping for Mortgage Rates

The mortgage process often begins with a pre-qualification, followed by a pre-approval. You’ll receive these from a qualified lender.

But first things first when shopping for mortgage rates, you will need to provide some financial information like income, assets, debt and other financial statements.

It’s also helpful if you know your credit score, as lenders use this to determine qualification and interest rates. Even if you don’t currently know your credit score, your lender can pull that information for you. If your credit score is over 740, you’ll likely receive a better rate. You can also alleviate any concerns that shopping around for a mortgage loan will hurt your score. Credit agencies can see when you’re shopping for mortgage rates and multiple inquires that occur within a 45-day window will only count as one inquiry.

Finally, it’s helpful to have an estimated home price in mind.

Providing this information to a lender and meeting their requirements can help you receive your pre-qualification, which isn’t always necessary for prospective sellers. However, a pre-approval is. Keep in mind that a seller is more likely to consider an offer with a pre-approval more seriously than an offer with a pre-qualification.

If you fill out a mortgage application, already meet the requirements, and receive pre-approval, you will be eligible for financing up to a certain amount.

Loan Types to Consider When Shopping for Mortgage Rates

There is no “one-size-fits-all” solution for a mortgage as everyone’s situation is unique, however, mortgage loans and their attached rates are classified by repayment terms and other factors:

  • Fixed-Rate Mortgages – These home loans are designed for repayment at a locked in rate over a set number of years. Different loan types If you choose a conventional 30-year fixed-rate mortgage you are likely to get an excellent rate from the right lender. A 15 or 20-year fixed-rate conventional mortgage will save you even more over time, as you’ll make higher monthly payments with less overall interest.
  • Adjustable-Rate Mortgages (ARM) – Home loans with adjustable rates have a fixed rate for designated time period (usually 5,7, or 10 years) with the rate changing during the adjustment period. ARMs often have adjustment caps that limit that amount of interest rate increase.
  • Federal Housing Administration Loans (FHA) – Guaranteed by the FHA, these loans offer lower down payment options and broader eligibility requirements.
  • Veterans Administration Loans (VA)  VA-approved lenders can offer great benefits to active duty and retired military borrowers. They also have the option to purchase with no money down, nor do the loans come with private mortgage insurance (PMI).

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How Do I Choose a Good Lender when Shopping for Mortgage Rates?

Now that you understand more about mortgage shopping, you are probably wondering how to shop for a mortgage lender.

There are a lot of options to choose from, but over the years, it’s become apparent that large financial institutions might not be the best choice for a few reasons:

  1. Your mortgage loan price is driven by investment firms. “Big banks” have incentives to sell conventional loans with those mortgage loans purchased by major investment firms. Usually, your rate isn’t decided based on the terms and prices investors will agree to.
  2. They aren’t really interested in your mortgage. Whether you choose their bank or someone else solely for the purpose of a mortgage is not important, however, you become valuable to them when they can cross sell you other products to earn more of your business.
  3. You receive little personalization – if any. Big banks won’t take the same type of interest in your needs as specialized lenders will. You’ll likely be required to choose from a couple of mortgage loan types with minimal flexibility. Plus, you may have a harder time receiving a mortgage as qualification requirements are often strict with little to no leniency.
  4. More overhead more costs. Brick and mortar banks cost more to operate. Therefore more costs get passed on to you as a buyer. Going with an online-only lender can help you see more significant savings regarding your interest rates. However, even online lenders such as RocketMortgage staff hundreds of employees and spends a lot of money on marketing and TV commercials. To truly maximize your savings choosing a smaller scale online lender will help you see the best possible interest rates available to you.

When shopping for mortgage rates, choose a lender that has your best interests at heart.

Receive the Best Mortgage Rate from a Personal Online Lender

Consider an online lender for your mortgage and avoid the limitations of big banks. Online lenders don’t have many of the overhead costs. Instead, they utilize those savings to offer better interest rates, less fees, and more incentives, especially for those who easily qualify.

Online lenders are also built around digital practices and they can often get you pre-approved and approved faster, as many of the practices are streamlined with business done online. is Florida’s premier online mortgage lender, and we work directly with well-qualified buyers to earn the best mortgage rates on the market.

Find a place you can truly call home. Get pre-approved and apply now for your home mortgage.