Lending Club Blog

How I Shopped for My Mortgage

When you are looking to buy a home, it’s important to treat the process of finding a mortgage like any other shopping trip. You want to find a mortgage in your price range, one that fits you well, and preferably one that’s on sale. Below are the steps that I took to find the right mortgage for my situation.

Know Your Credit Score
The banks and mortgage brokers will be using your credit score, at least in part, to determine the interest rate that they’ll charge you. By knowing your score, you’ll be armed with the same information that they have, and you will be in a better position to negotiate.

Know Your Rate
Knowing your credit score leads directly into this next point. Based on your score, you should be able to get a good idea of the rate that you can expect. I like to follow the average rates for the different loan types, which tend to be printed in the business sections of most newspapers on at least a weekly basis. While your credit score will affect whether you get a better or worse rate than the average, you can use the average as a starting point for determining what your rate will be.

Know Your Options
Even without getting into the exotic loans that have been making the news lately, there are still many different types of mortgages out there. The main decisions that you will have to make are whether to go with a fixed or adjustable rate loan and the length, or term, of your loan. Avoid negative amortization schemes, and watch out for loans with terms that look too good to be true.

Negotiate with Multiple Sources
This is perhaps the most important step that I took when finding my mortgage. By applying with more than one funding source, you get validation of the rates that each is offering you. If one offers a better rate, you’ll have instant negotiating leverage to try for a better rate with the others. If all of the rates are the same, then you can use the company that you feel most comfortable with. A good mortgage broker can help you through this process.

Evaluate the True Cost of the Loan
The cost of your loan is determined by more than just the interest rate. Other costs and credits, as well as your personal situation, will determine which loan is the most cost effective for you. In my case, I went with a slightly higher interest rate from the lender that was offering to pay for more of my closing costs. Knowing that I was going to pay my loan off early, I calculated the total cost of each option and found that the savings in closing costs outweighed the marginally higher rate.

The day may come when the home mortgage market is revolutionized by a P2P lender like Lending Club. Until that time comes, and we are forced to use traditional lending sources, I hope that my method of shopping for a mortgage provides some ideas that can save you money as well.

Friday, September 14th, 2007 at 7:10 am

Comments (0)


Welcome Home

Lending Club named #5 on Forbes’ Most Promising Companies List

Get ready for tax season with Lending Club’s Tax Form Guide

New Adjusted Return Metric

See more
Lending Club Awards
  • Archives z

Recent Posts

Credit Performance Update

Summary: Credit performance of our standard program is coming… Read More »
February 7, 2016

New Infographic on Small Business Financing

Check out our latest infographic on the state of… Read More »
December 17, 2015

More Data Coming for Investors

We’re always seeking feedback and looking to make the… Read More »
November 10, 2015

Lending Club Surpasses $13 Billion

Check out our updated infographic to see what a… Read More »
October 29, 2015

Lending Club Launches Multi-Draw Line of Credit for Small Businesses

We’re excited to announce the… Read More »
October 16, 2015

Bloomberg Markets Names Renaud Laplanche on its 2015 “Most Influential” List

Read More »
October 6, 2015

Congratulations, Carrie! Named 2015 Financial Woman of the Year by The Financial Women of San Francisco

Read More »
October 5, 2015

Congratulations to Carrie Dolan – Named one of American Banker’s 2015 Most Powerful Women in Finance

Read More »
September 22, 2015

Welcome Nebraska, Kansas, and Indiana Investors!

We recently welcomed residents of Nebraska, Kansas, and Indiana… Read More »
September 21, 2015

Lending Club Job Spotlight: Technology & Member Support

Our Technology team develops and… Read More »
September 14, 2015


We went public today!

Ringing the bell this morning at the New York… Read More »
December 11, 2014

New and Improved Statistics Page

We recently redesigned our Loan Statistics page to make… Read More »
November 13, 2014

Lending Club Honored with Economist Innovation Award

This month I was honored… Read More »
October 15, 2014

Welcome Vermont Investors!

Today, we’re thrilled to welcome residents of the state… Read More »
September 4, 2014

We filed to go public today

We filed a registration statement with the SEC today… Read More »
August 27, 2014

Our Billion Dollar Quarter

We’re excited to announce  that we’ve facilitated over $5… Read More »
July 8, 2014

Is Lending Club Available in My State?

Is Lending Club available in my state? That is… Read More »
July 7, 2014

Lending Club Joins Senator Cory Booker to Discuss Improving Access to Capital for Small Businesses

Read More »
June 20, 2014

Lending Club Named a CNBC Top 50 Disruptor for a Second Year

For the second year in… Read More »
June 17, 2014

PRIME is now Automated Investing

Lending Club is excited to announce that PRIME has… Read More »
May 14, 2014
View All w