Mortgage rate estimator

[dsw283]

How accurate is the myfico mortgage rate estimator? I've seen several online and they are all pretty close in relation to one another, we recently had a pre-approval and received a rate over half a percent more than what what I was expecting. I went into this having pulled all three of both of our scores so I just want to make sure I'm getting correct information.

[Anonymous]

Did you read the fine print? Any rate you see quoted is typically best case scenario in terms of down payment, loan amount, and credit score. Also, rates vary by region. You didn't specify the makeup of your credit profile, so there's no way to say what rate you really should have been expecting.

The rates shown are averages based on thousands of financial lenders, conducted daily by Informa Research Services, Inc. The 30-year fixed home mortgage APRs are estimated based on the following assumptions. FICO scores between 620 and 850 (500 and 619) assume a Loan Amount of $150,000, 1.0 (0.0) Points, a Single Family - Owner Occupied Property Type and an 80% (60-80%) Loan-to-Value Ratio.

[StartingOver10]

^^^Exactly. Also remember each lender has their own rates based on your profile. Lenders are competitive - but some are more competitive than others.

In order to accurately compare your costs you will need to see the rate and the closing costs. Some lenders offer a lower rate and have higher costs and others offer a higher rate and lower costs.  Just because you are getting the same loan at lender A doesn't mean lender B  won't have a better rate - sometimes even lower costs and a better rate.

I see this all the time even on government insured loans. 

EDIT:  I just had this happen to one of my clients that came to me with a pre-approval from a lender I had not worked with before. That lender had her at a very high rate for a VA loan (4.875) due to her profile. When we were two weeks out from closing they suddenly couldn't complete the loan. I moved her file (with her permission) to another lender that I work with routinely. She got a rate of 4% (same profile) and we closed. Ultimately the rate was lower and the costs were lower and we closed timely. Different lenders with different guidelines for the same loan. 

[Anonymous]

Most honest lenders will quote you a rate based on your actual size down payment and based on paying zero points (unless you want to buy down the rate of course). Most websites and online banks will quote you a rate assuming 20-30% down payment and paying 1-2.5 points.