How Many Mortgage Lenders Should I Apply With?

To be honest, as many as you have time to. Get a mix of lender types (banks, brokers, etc.) and make sure to ask for a loan estimate from each - they are required by law to provide you one if you ask for it.

Things to Consider...

1. Time and Effort: Each mortgage application requires submitting documents (e.g., proof of income, tax returns, credit history). Pro tip is to have a Dropbox folder that you can share with your lender with a filled out mortgage application.

2. Credit Pulls and Your Credit Score: Each application results in a hard credit inquiry, however multiple inquiries within a 45-day window (according to FICO guidelines) are treated as a single inquiry for mortgage shopping purposes and will not negatively impact your credit score more than a single inquiry.

3. Your Financial Profile

   • If your credit score or income is borderline, applying to more lenders can increase your chances of approval.

   • If you have excellent credit and a strong financial profile, you may need fewer applications since you're more likely to qualify for competitive rates and have leverage to negotiate a better rate.

How to Compare Mortgage Lenders

When evaluating multiple mortgage offers, consider these key factors:

1. Interest Rates: Compare the mortgage rates offered by each lender. Even a small difference in interest rates can save you thousands over the life of the loan.

2. Annual Percentage Rate (APR): APR reflects the total cost of the loan, including interest and fees. It provides a more accurate comparison than the interest rate alone, but make sure to compare apples to apples. An APR for a fixed rate mortgage isn't comparable to one for an ARM.

3. Points, Fees, and Closing Costs: Some lenders may charge higher origination fees or other closing costs. You may also want to pay optional mortgage points to lower your interest rate. Fees will be clearly outlined on your Loan Estimate.

4. Loan Options: Ensure the lender offers the loan type you need, whether it’s a conventional loan, Jumbo, FHA loan, VA loan, USDA loan, Fixed, ARM, Interest Only, etc.

5. Customer Service and Reputation: Make sure the lender can execute. You don't want to be awake the night before closing waiting for your lender.

Conclusion

Make sure to shop around - a little bit of effort can save you thousands of dollars.