Hunting for a House? Shop Mortgage Rates Online Before Talking to a Loan Officer

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Buying your first home has a seemingly endless number of steps involved, but learning how to get the best mortgage rate online is one you can easily tackle yourself. While some people may choose to work with a mortgage broker to find the best interest rate available, shopping for rates online is another great option— especially if you have a relatively straightforward financial profile.

You’ve doubtlessly heard about how to get the best mortgage rate when you shop around online, but you’re probably unsure about where to get the best deals.

After chatting with top mortgage experts, we’ve come up with this list of everything you need to know about finding the best mortgage rate online— plus some extra tips to make the process easier.

Here’s our quick and simple guide to finding the best mortgage rate online and to becoming the smartest homebuyer around.

What It Means to Shop Mortgage Rates Online

Much like any other research that begins online, shopping for mortgage rates online is all about taking advantage of multiple resources, and comparing your offers before making any decisions.

“Shopping rates online is a quick and easy way to give you a rough idea of the rates you qualify for,” said James Surrey, founder of Review Home Warranties. “The keyword here is ‘rough,’ meaning it’s somewhat of a broad range. While shopping online is a good starting point, it fails to provide a more detailed evaluation of your eligibility.”

By entering basic information like your name and credit score into third party sites such as LendingTree, or even to lender sites directly, you can begin to learn what mortgage rates you may qualify for to set you on the path to buy a home. This is helpful for anyone in the early stages of shopping for a mortgage, but as Surrey said, these online quotes aren’t a guarantee that you’ll actually secure the same mortgage when you eventually apply.

The reasoning? Applying for a mortgage is a more involved process that includes experts assessing your financial profile in its entirety. They look at things like your income, assets, as well as your outstanding debts — all of which tells lenders a more about your debt-to-income ratio, aka how much debt you owe compared to your income. Only once all of these things are considered can you officially be approved for a mortgage and this happens directly with a lender later in the process. There’s more to all of this than looking at the interest rate.

Who Gets the Most from Shopping Online?

Now that you know a bit more about starting your mortgage search online, let’s talk about who this strategy might be best for.

Buyers with Good Credit

Shopping mortgage rates online will be much easier for buyers who have above-average to good credit scores. If your credit score needs some TLC, you might be better off contacting mortgage brokers or lenders directly since they’ll likely be able to help you find the best quotes faster.

“If you are in a unique, atypical financial situation, for example if you are self-employed, buying a very unique home, or have a poor credit score, online lenders will be less likely to be able to offer a mortgage which fits your needs,” said Scott Nelson, CEO of MoneyNerd.

Buyers with Typical Finances

Like Nelson said, the more straightforward your finances, the easier time you’ll have finding competitive mortgage rates online. Since many of these online mortgage rate tools use standard (and basic) info to calculate offers, they won’t be able to account for anything unusual, like if you have a lot of debt or need to borrow a jumbo loan. You might need to get private mortgage insurance, depending on your down payment.

This also won’t account for homebuyers who have less than 20% for a down payment. Most of these online tools assume buyers are in excellent financial standing, so if your finances include anything out of the ordinary, contacting a lender directly might be best.

Buyers who Want a Standard Mortgage

Much like buyers with good credit and those with typical finances, buyers looking for a standard fixed rate 30 year mortgage will also have an easier time finding rates online. Most of these online tools will default to standard mortgage offerings, meaning— you’re more likely to find a loan that works for you if that’s the kind of mortgage you want.

How to Shop Mortgage Rates Online

One of the best ways to get started shopping mortgage rates online is by using a third party site. While you won’t be able to borrow from these sites directly, they can provide an accurate overview of the best home loans offerings available.

“Sites like NerdWallet and LendingTree provide mortgage calculators that are free and intuitive to use,” said Surrey. “Just input basic information like your budget and credit score, and you’ll get a wealth of personalized information regarding potential rates you’re eligible for.”

Once you’ve found a few interesting offers, it’s time to contact lenders directly. It’s possible they beat you to this step, but either way the important thing to follow up with the lender directly to be sure you actually qualify for the rates they initially offered. At this step you’ll likely be required to provide more personal information such as proof of income, assets and any outstanding debts. Armed with this info, your lender (or mortgage broker) should be able to tell you just how close they can get you to that initial quote.

More Insider Tips

One way to ensure that the information online is up-to-date is by checking publication dates. “When looking at a mortgage rate comparison site, look for a publishing date,” said Surrey. “Mortgage providers change rates and policies frequently, so information outside the provider’s official website can quickly become outdated. If you see a rate from a review or comparison site, visit the mortgage official site to verify the information.”

Remember that your final offers will ultimately depend on your complete financial profile. “Be aware that rates you see are typically only applicable for people with an existing high credit score, usually above 700,” said Surrey.

Nelson offered a similar note of caution. “Companies often promise fantastic rates up front, but then don’t follow through once they’ve seen your credit score. Don’t be fooled by such offers or you’ll waste a lot of time,” he said.

The Bottom Line

Shopping for mortgage rates online is a great way to get started and begin understanding the kind of mortgage packages you may qualify for, however it’s important to remember that those initial quotes might not be the most accurate. Because applying for a mortgage is a more involved process with multiple steps to verify your financial information, you’ll need to follow up with lenders directly in order to get approved for the rates you find online.

But by starting your mortgage search online early, you’ll have a much better idea of what kinds of loans (and the interest rates) you can get— and be more prepared to actually finance those endeavors when you’re ready to move forward with your mortgage.

Contributor Larissa Runkle specializes in finance, real estate and lifestyle topics. She is a regular contributor to The Penny Hoarder.