1. Compare Same Programs
2. Compare Interest Rates from the same day
3. Compare Same Lock-In Periods
4. Compare the points (or "price") of your target interest rate
5. Compare Closing Costs and Fees

1. Compare Same Programs

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There can be a wide variance in rates and costs between different loan programs. For fixed rates, be sure to compare the same terms (15 year, 30 year, etc.). For adjustable rates, be sure to compare loans with the same initial start rate period (1-year ARM, 3/1, etc.). Universal Funding offers reduced-closing costs and no-closing cost options for a slightly higher interest rate and therefore should not be compared to loans in which full closing costs are charged.

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2. Compare Interest Rates from the same day

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Mortgage interest rates change daily (sometimes more than once a day) and closely follow the movement of the U.S. Treasury Bond market. Assuming one lender's rate will remain the same while you compare it to another lender's rate the next day can lead to inaccurate comparisons. Universal Fundingupdates its online advertised rates daily and offers up-to-the-minute accuracy.

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3. Compare Same Lock-In Periods

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Typically, the shorter the Lock-In period you select the better your interest rate will be. However, use this information with extreme caution. Many lenders will advertise interest rates with very short Lock-In periods (12-25 days) in order to be more competitive. Although, if your loan does not close and fund within that time frame, you are no longer guaranteed that interest rate! Universal Funding offers a minimum Lock-In period of 30-45 days so that there is adequate time to close your loan and guarantee your interest rate.

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4. Compare the Points (or "Price") of your target Interest Rate

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Typically, you can secure a lower interest rate by paying more points; however, getting the lowest interest rate does not necessarily translate into getting the best deal. Points are fees that must be included in the calculation of total closing costs. One point equals one percent of the loan amount and should be converted into an actual dollar amount for the purpose of comparisons. Points can manifest themselves in a number of different classifications including "discount points," "loan origination points," and "mortgage broker" points. However, there is no significant difference in the different classifications. In other words, from you the borrower's perspective, points are points.

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5. Compare Closing Costs and Fees

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The variable closing costs and fees can be broken down into four categories:

Points
(discussed above in: "4.Compare the points (or "price") of your target interest rate" )

Appraisal, Credit Report, and Application Fees
These fees do not tend to vary much between lenders.

Lender Fees
These fees can manifest themselves in a number of different types including underwriting fees, processing fees, tax related service fees, flood zone certification fees, funding fees, courier fees, wire transfer fees, document preparation fees, etc.

Title Fees
These fees are paid to the Title Company (a third party) which does the title work on your home and will be responsible for the settlement of your loan. Charges include title search and abstract fees, settlement fees, title insurance policy premiums, survey charges, etc. The total fees charged by title companies can vary greatly. Universal Funding has secured special arrangements with several title companies in order to offer reduced fees. However, you should feel free to shop around.

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Universal Funding, LLC is a licensed mortgage company in the states of Maryland and District of Columbia.
©2007 Universal Funding, LLC. All Rights Reserved.
5620 St. Barnabas Rd., Suite 290, Oxon Hill, MD 20745
Phone 301.505.2515 Fax 301.505.2518 Email info@universalfundingllc.net
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