Best Ways to Rate Shop

Here are some tips on how to rate shop for a loan:

1. Get your credit report and score.

‍Your credit score is one of the most important factors that lenders will consider when deciding your interest rate. So before you start rate shopping, make sure you have your credit report and score.  If you see any mistakes, file a dispute. The condition of your credit report is essential. The higher your credit score, the lower the interest rate you are offered! If your credit is low, there are steps you can take to increase your score.

‍2. Know what type of loan you want.

Are you looking for something with promo rates, or do you prefer a fixed rate? Are you looking for a line of credit, or do you prefer an installment loan that has discrete monthly payments (and an end date)? Decide what works better for you. If it’s a car or home, how much of a down payment can you make? This will impact the rates you receive - the more you put down, the less risky the loan, and the lower the rate.

‍3. Get quotes from multiple lenders.

Don't just get a quote from one lender. Get quotes from at least three to five lenders so you can compare rates and terms. You can get quotes from banks, credit unions, and online lenders. You can compare rates in places like Loanry and Bankrate.

‍4. Window for rate shopping.

FICO and VantageScore give you a window of time, typically 14-45 days, to rate shop for a mortgage or auto loan. During this window, all hard credit checks for the same type of loan in any one of those categories count as just one inquiry. Keep it safe and try to stick to 14 days.

‍5. Ask about discounts.

Some lenders offer discounts for things like setting up auto-pay or for paying on time for a certain amount of time. So be sure to ask about any discounts that may be available to you.

‍6. Be prepared to negotiate.

‍Once you've gotten quotes from a few lenders, don't be afraid to negotiate. You may be able to get a lower interest rate or better terms if you're willing to haggle.

‍7. Compare.

You might want to go for the lowest monthly payment - this isn’t necessarily the best deal, because it’s typically spread over a much longer period of time (making the overall interest higher). The lowest rate is usually better, but it won’t always work for you. Consider a monthly payment that you can reasonably afford, and make sure to watch out for origination fees. Ask for an itemized summary of estimated fees from each lender you work with to compare options.

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Rate shopping can be a bit time-consuming, but it's worth it in the long run. By following these tips, you can be sure you're getting the best possible deal on your mortgage.

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Here are some additional tips for rate shopping:

• Be prepared to provide documentation. Lenders will need to see proof of your income, assets, and debts. So be sure to have this documentation ready when you start rate shopping.
• Don't be afraid to ask questions. If you don't understand something, ask the lender to explain it to you.
• Be patient. It may take some time to find the best rate. Don't be discouraged if you don't get the best rate right away. Keep shopping and you'll eventually find a great deal.
• Check out Rate Crusher on the Debbie app. The new marketplace that connects you to credit unions in your area to help you pay off and replace your existing high-interest debt with a lower-interest loan.

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