Check your understanding

Check your understanding of key concepts before moving to the “Do it yourself” section.

Indicate whether each statement is True or False.

1. Once you find a mortgage professional that you trust, you don't need to worry about anything.

Correct! It is important to find a professional to work with but you should educate yourself and stay involved in the decision making throughout the mortgage process. You should expect your loan representative to fully understand your needs and circumstances and to explain the decisions to be made in terms that you can understand. 
Incorrect. It is important to find a professional to work with but you should educate yourself and stay involved in the decision making throughout the mortgage process. You should expect your loan representative to fully understand your needs and circumstances and to explain the decisions to be made in terms that you can understand. 

2. Your top priority is to choose a large, well known lender or brokerage firm with a reputation you can trust.

Correct! Regardless of the institution you deal with, it is most important to find an individual loan officer or broker that you are happy with, and can trust.
Incorrect. Regardless of the institution you deal with, it is most important to find an individual loan officer or broker that you are happy with, and can trust.

3. Mortgage brokers have access to lower rates than you will find at a bank or other mortgage lender.

Correct! Lenders quote wholesale rates to lenders. Wholesale rates are lower than retail rates that are available to the general public.
Incorrect. Lenders quote wholesale rates to lenders. Wholesale rates are lower than retail rates that are available to the general public.

4. If you find out which lender your broker is getting your loan from, you could go directly to that lender and get the same rate that the broker is getting for you.

Correct! The lender will quote you their retail rate if you contact them directly. They will quote the broker a lower, wholesale rate.
Incorrect. The lender will quote you their retail rate if you contact them directly. They will quote the broker a lower, wholesale rate.

5. Your lender is required to give you a Good Faith Estimate of Closing Costs within 3 days of application.

Correct! In fact, if you make the application in person you should ask for the Good Faith Estimate immediately.
Incorrect. Your lender is required to give you a Good Faith Estimate of Closing Costs within 3 days of application. In fact, if you make the application in person you should ask for the Good Faith Estimate immediately.

6. At closing, the terms of your loan must match the terms described in the Good Faith Estimate.

Correct! Your lender is not legally bound by the Good Faith Estimate.
Incorrect. Your lender is not legally bound by the Good Faith Estimate.

7. It’s best to decide what type of loan you want before you interview potential lenders and brokers.

Correct! Your loan officer or broker should help you establish goals and choose the type of loan that is appropriate for your needs and circumstances. If your mortgage professional does not focus on these issues in your first interview then you should probably find someone else to work with.
Incorrect. Your loan officer or broker should help you establish goals and choose the type of loan that is appropriate for your needs and circumstances. If your mortgage professional does not focus on these issues in your first interview then you should probably find someone else to work with.

8. Your goal is to get a low interest rate without paying any fees or points.

Correct! Up-front costs should not be your main concern. They are insignificant compared to the amount of interest you will pay over the life of your loan. Your goal is to get knowledgeable and trustworthy advice about loan choices and interest rates. There is really no such thing as a “no cost” loan.
Incorrect. Up-front costs should not be your main concern. They are insignificant compared to the amount of interest you will pay over the life of your loan. Your goal is to get knowledgeable and trustworthy advice about loan choices and interest rates. There is really no such thing as a “no cost” loan.

Practice what you learned Do it yourself

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