The most reliable way to compare mortgage offers is to ask each lender for a Loan Estimate and compare them line by line, not just the interest rate. The Consumer Financial Protection Bureau (CFPB) suggests looking at the loan amount and interest rate, the monthly payment including mortgage insurance and escrow, the upfront lender costs, the cash you need to close, and the five-year cost of borrowing shown on page 3. A lower rate with higher fees can cost more than a slightly higher rate with lower fees, and the right choice depends on how long you expect to keep the loan. Rates change daily and depend on your credit, down payment, and loan type, so use the same loan scenario with every lender and ask each one what is and is not locked.
What Is a Loan Estimate?
A Loan Estimate is a standardized three-page form that a lender gives you after you apply, showing the proposed loan terms, estimated monthly payment, and closing costs. Because every lender uses the same layout, you can place two or three side by side. Our post on closing costs explains what the fees cover.
What Should I Compare?
Where to look | What to compare |
|---|---|
Page 1 | Loan amount, interest rate, monthly principal and interest, mortgage insurance, and the estimated total monthly payment including escrow |
Page 1 | Whether the rate can change (for adjustable-rate loans, the worst case) |
Page 2, Sections A and B | Origination charges and services you can or cannot shop for |
Page 2, Section J | Total closing costs and any lender credits |
Page 2 | Cash to close |
Page 3 | The "In 5 Years" line, which the CFPB describes as the total you will have paid plus the principal paid off |
This reflects the CFPB's guidance on comparing offers. Ask each lender to walk you through anything unclear.
Why Is the Lowest Rate Not Always the Cheapest Loan?
A lender may offer a lower rate in exchange for upfront charges, sometimes called points, or a higher rate in exchange for a credit toward closing costs. Which is better depends on how long you keep the loan. That is why the five-year comparison and the cash-to-close line matter along with the rate. Our post on whether to wait for rates to drop explains the bigger picture.
How Do I Make a Fair Comparison?
- Use the same scenario. Same loan type, loan amount, down payment, and lock period with every lender.
- Request Loan Estimates around the same time, since rates move.
- Ask about rate locks. Find out how long the lock lasts and what it costs to extend.
- Check for mortgage insurance if your down payment is under 20%.
- Compare different types of lenders. Banks, credit unions, and mortgage brokers can all offer estimates, and VA, FHA, and conventional loans have different rules.
- Ask your agent for names, but make your own choice. Our post on finding an agent and lender you can trust has more.
Local Context: Comparing Lenders in the Valley
Buyers in the Las Vegas Valley may use national lenders, local lenders, credit unions, and programs aimed at first-time or military buyers. Nevada programs and local down payment assistance can have their own requirements, so ask each lender what they handle.
Related Reading
Our post on the best mortgage lenders for Las Vegas properties explains how to compare lender types, and our post on the real monthly payment on a Las Vegas home shows what goes into the full budget.
This post reflects general information as of publication and is not financial advice. Rates, fees, and lender requirements change and vary by borrower. No rate or approval is guaranteed. Confirm all terms directly with licensed lenders. Speak with Sherwyn or Ferguz Colonia about buying in the Las Vegas Valley.
Sherwyn Colonia, NVRE License #S.185645 | Ferguz Colonia, NVRE License #S.199036 FIV Realty | (702) 234-5985 | thecoloniateam.com This is not intended to solicit properties currently listed for sale. Equal Housing Opportunity. All information deemed reliable but not guaranteed. We are committed to compliance with the Fair Housing Act and the Nevada Real Estate Division's licensing and advertising regulations. Sherwyn and Ferguz Colonia help buyers prepare to compare financing options across the greater Las Vegas Valley.
