Compare the actual cost, not just the interest rate

When you receive multiple mortgage offers, the interest rate is only one piece of the cost. You need to look at the Annual Percentage Rate (APR), which includes the interest rate plus fees the lender charges — origination fees, processing fees, underwriting fees, and points. A loan with a lower interest rate but higher fees may cost you more over time than one with a slightly higher rate and lower fees.

Request a Loan Estimate from each lender. Federal law requires lenders to provide this document within three business days of your process. The Loan Estimate shows the interest rate, APR, estimated monthly payment, all closing costs, and cash due at closing. Line them up side by side. The APR on each estimate is the most direct way to compare total cost across different offers.

Pay attention to the loan term as well. A 15-year mortgage has higher monthly payments but you pay far less interest over the life of the loan. A 30-year mortgage spreads payments over longer, lowering the monthly amount but increasing total interest paid. Some offers may include different terms — compare the same term across lenders when possible.

Key Takeaways

  • The APR on your Loan Estimate is the most accurate way to compare total cost across lenders, because it includes both interest rate and fees.
  • Request Loan Estimates from each lender within the same few days so interest rates and market conditions are comparable.
  • Lock your interest rate in writing once you choose a lender, because rates can change daily and your offer may expire.
  • Closing costs vary by lender and location, so ask each lender which costs are negotiable or can be reduced.
  • Some lenders offer rate buydowns or lender credits that lower your upfront costs or monthly payment — ask about these options before deciding.

Request Loan Estimates at the same time from multiple lenders

Timing matters because mortgage rates change daily. If you explore to one lender on Monday and another on Friday, the rates may be different even if market conditions haven't shifted. Request Loan Estimates from all lenders within the same day or two so you're comparing offers under the same conditions.

When you request an estimate, provide the same information to each lender: the same property address, the same down payment amount, the same loan term, and the same loan type (conventional, FHA, VA, or USDA). Lenders may ask slightly different questions or pull your credit at different times, but the core details should be identical so the offers are truly comparable.

Keep in mind that a Loan Estimate is not a final commitment. It's an estimate based on the information you provided. The actual closing costs may shift slightly if the appraisal comes in different than expected, if your credit score changes, or if you change the loan details. But the estimate gives you a solid basis for comparison right now.

Understand what you can negotiate with each lender

Some costs on your Loan Estimate are set by third parties — the appraisal fee, title insurance, property taxes, and homeowners insurance are largely fixed. But other costs are negotiable or can be reduced. These include origination fees, processing fees, underwriting fees, discount points, and lender credits.

A lender credit is money the lender gives you toward closing costs in exchange for accepting a higher interest rate. A discount point is an upfront fee you pay to lower your interest rate — each point typically costs 1% of the loan amount and lowers the rate by roughly 0.25%. Ask each lender whether they offer rate buydowns (where the seller or lender pays points on your behalf) or whether they can reduce their fees to match a competitor's offer.

Some lenders will negotiate; others have fixed pricing. It never hurts to ask, especially if you're a strong borrower with good credit and a solid down payment. The worst they can say is no. If one lender's offer is close but not quite as good as another's, ask if they can adjust their fees or offer a credit.

Lock your interest rate once you decide

Once you choose a lender and accept their offer, ask them to lock your interest rate in writing. A rate lock means the lender guarantees that rate for a set number of days — typically 30, 45, or 60 days — even if market rates move. Without a lock, your rate can change between now and closing.

Ask the lender how long the lock lasts and whether there are any conditions. Some locks are "float down" locks, meaning if rates drop during the lock period, you can take the lower rate. Others are fixed — you keep the locked rate regardless of market movement. A float down lock is more valuable but may come with a higher rate or fee.

The lock period should extend past your expected closing date. If your closing is scheduled for 45 days out, lock for at least 45 days, ideally 60, to give yourself a buffer if the appraisal or underwriting takes longer than expected.

Watch for rate lock expiration and extension fees

If your closing is delayed and your rate lock expires before you close, the lender can charge you a fee to extend the lock, or your rate may reset to the current market rate. This is rare, but it happens. Ask your lender upfront what happens if closing is delayed and whether they charge to extend a lock.

Stay in touch with your lender's loan officer throughout the process. Ask for updates on the appraisal, title search, and underwriting. If you see delays coming, ask about extending your lock early rather than waiting until it expires. Some lenders will extend at no cost if you ask before the lock expires; others charge a fee.

Decide between lenders based on total cost and service

After you've compared APRs, negotiated fees, and understood the lock terms, you have enough information to decide. The lender with the lowest APR is usually the best choice, but not always. If one lender's APR is slightly higher but their closing costs are much lower, the total amount you pay out of pocket at closing may be less.

Consider also the lender's reputation and responsiveness. Read reviews on Google, the Better Business Bureau, or Zillow. Ask your real estate agent which lenders they work with most often and whether they've had good experiences. A lender who communicates clearly and moves quickly through underwriting is worth a small premium in rate or fees.

Once you've decided, notify the other lenders that you're moving forward with a different offer. This allows them to close out your process and frees up their time. You've already pulled your credit with them, so there's no additional damage to your credit score from the other inquiries.

Frequently Asked Questions

Will getting multiple mortgage offers hurt my credit score?

Multiple mortgage inquiries within a short window (typically 14 to 45 days, depending on the scoring model) count as a single inquiry for credit scoring purposes. So requesting Loan Estimates from several lenders in the same week will have minimal impact on your score — usually just a few points. The impact fades within a few months.

Can I switch lenders after I've locked my rate?

Yes, but you may lose your rate lock if you switch. When you switch lenders, the new lender will issue a new Loan Estimate and a new rate lock. If rates have risen since your original lock, your new rate will be higher. If rates have fallen, you may get a better rate. Ask the new lender about their rate lock terms before you switch.

What if one lender's offer expires before I decide?

Loan Estimates are typically valid for three business days, but some lenders extend this to five or ten days. If an offer is about to expire and you're still deciding, contact the lender and ask them to extend it. Most will extend at no cost if you ask before expiration. If they won't extend, you can always request a new Loan Estimate, though your rate may have changed.

Should I choose the lender with the lowest rate even if their service is slow?

A lower rate matters, but a slow lender can cost you money too. If underwriting takes so long that your rate lock expires, you may have to pay to extend it or accept a higher rate. If closing is delayed past your home inspection important date, you may lose your purchase agreement. Choose a lender with a reasonable rate and a track record of closing on time.

What's the difference between a pre-approval and a Loan Estimate?

A pre-approval is a preliminary assessment of how much you can borrow based on your credit, income, and assets. A Loan Estimate is a detailed breakdown of the specific loan terms, interest rate, and closing costs for a particular property and loan amount. You get pre-approved early in your home search; you get Loan Estimates once you've made an offer on a specific property.