Shopping for a Mortgage: Steps to Compare and Choose the Right Loan

Mortgage shopping isn’t fun, but it’s one of the most important financial decisions you will ever make. A small difference in your loan terms could mean tens of thousands of dollars saved or lost over the life of your mortgage.

Here’s the good news: with the right strategy, shopping for a mortgage doesn’t have to feel overwhelming. This guide lays out everything you need to know in plain English, no fluff, no confusion.

• Learn how to compare interest rates, APRs, fees, and terms across lenders.
• Avoid common mortgage shopping pitfalls.
• Get tips to make smarter, confident loan decisions.
• Understand required disclosures and why they matter.

Before comparing lenders, get clear on what shapes your loan offer:

• Credit Score – Higher scores unlock better rates. Pull your reports from all three bureaus.
• DTI (Debt-to-Income Ratio) – Lenders prefer under 43%. Lower is better.
• Loan Type – FHA, Conventional, Jumbo, Non-QM, or HELOC? Each has its requirements and benefits.
• Down Payment – A higher down payment may lower your rate and eliminate mortgage insurance.

Pro Tip: Use a prequalification tool to get a general sense of what you can afford. But remember, it’s not an offer.

Once you’re prepared, start reaching out to multiple lenders. You’ll want to request Loan Estimates (LEs) from each.

Here’s what to compare:

• Interest Rate vs. APR – APR reflects the total cost, including fees.
• Origination Charges – These can vary drastically.
• Third-Party Fees – Title, appraisal, credit checks.
• Loan Terms – Fixed vs. adjustable, 15 vs. 30 years.

Heads Up: All lenders must give you a standardized Loan Estimate within 3 business days of application under TILA (Truth in Lending Act).

Get Pre-Qualified and Save Up to 1.5% at Closing with reAlpha

Save up to 1.5% at closing when you combine real estate and mortgage services with reAlpha.

Check if you qualify

Don’t just compare numbers, ask these smart questions:

• Can you lock my rate, and for how long?
• What happens if rates drop before we close?
• Are there any prepayment penalties?
• Will this loan require mortgage insurance?

Avoid lenders who:

• Don’t disclose the APR upfront
• Avoid giving you a Loan Estimate
• Promise rates that sound too good to be true
• Use pressure tactics or urgency

These are all potential UDAAP (Unfair, Deceptive, or Abusive Acts and Practices) violations.

After comparing your Loan Estimates side by side:

• Use a mortgage comparison worksheet
• Match your offer to your financial goals (lower monthly vs. faster payoff)
• Read the fine print before signing anything

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• Don’t shop too late. Give yourself time before locking in.
• Don’t assume your bank offers the best deal.
• Don’t let emotions drive your choice; look at the math.

Buying a home is a big decision - and having the right information puts you ahead. But the real advantage comes from pairing smart research with a smarter way to buy.

When you use a reAlpha real estate company, you can be eligible to receive up to 1% of the home purchase price back as a credit at closing. Add reAlpha Mortgage, and that rebate can increase to up to 1.5% back, helping offset closing costs and keep more money in your pocket when it matters most.

The rebate is simple, transparent, and applied directly at closing - no complicated hoops, no delayed payouts. Just real savings tied to using a fully integrated homebuying experience.

See how much you could save:

• Check your eligibility

• Explore homes that fit your budget today.

• Your next move could come with thousands back at closing.

• Estimate your savings → Rebate Calculator

It’s smart, simple, and built to save you thousands.

Explore your savings at reAlpha Mortgage →

Buying a Home? Get up to 1.5% Cash Back at Closing

Get pre-approval first, then start exploring homes knowing you can receive up to 1.5% of the home price back at closing.

Find your dream home