How To Shop For A Mortgage In Today's Housing Market

How To Shop For a Mortgage In Today’s Housing Market

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will cover and discuss how to shop for a mortgage in today’s housing market. Just over a year ago, mortgage rates were at under 3.0% on a 30-year fixed-rate mortgage. Today, mortgage rates have spiked to over 6.0% and signs indicate rates are going higher. Inflation numbers are nearing 9.0% which is at a 40-year high. The entire mortgage industry is in turmoil with tens of thousands in layoffs, mortgage companies shutting down, and production volume at dangerous levels. The bull market for mortgage industry professionals has not just come to an abrupt stop but many are being threatened with company shutdowns, permanent layoffs, and unheard-of drop in wages and revenues. Besides the mortgage industry, many other industries are hurting due to the uncertain economy.

What Is The Cheapest Month To Buy a House?

The cost to buy a home has skyrocketed to record levels. Not only rate the highest in over 20 years, but many homebuyers need to pay discount points due to market pricing. Homebuyers are looking for every possible way to cut costs and fees in obtaining a mortgage. One of the frequently asked questions by homebuyers is what is the cheapest month to buy a house. In general, home prices are lowest in January. Home prices normally start dropping in early December into January.

Despite the uncertain state of the U.S. economy today, many homebuyers do not want to get priced out of the housing market. Many saw home prices skyrocket right before their eyes over the past couple. In general, the Fall time is the best time of the season to buy a home due to the start of the new school year. Many homebuyers are panicking to buy a house in 2024 due to the skyrocketing prices of homes. Despite the unstable and uncertain economy, the demand for homes is stronger than ever.

Will House Prices Drop Soon?

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Will Housing Prices Go Down in 2024?

If you have been following the news, you know the housing market is in some turmoil. Many home buyers feel there is one last push before the federal reserve really cools off the housing market. Due to recent rate hikes, lenders are competing for your business more than ever. In this blog, we will discuss the proper way to compare lenders when shopping for a home loan. Unfortunately, many lenders use deceptive practices in order to earn your business. We will try to give you the most straightforward approach to make sure you are saving you and your family the most amount of money. The Gustan Cho Associates do all we can to make sure we can offer the most competitive mortgage products available! 

What To Do In The Year Leading Up To Buying a House?

Getting a mortgage is a stressful time. Shopping for a mortgage can add even more stress to the process. It is important to select a mortgage team that can confidently get your loan to the finish line, but equally as important to make sure you are getting a fair deal. Since the market is so competitive, we have simplified our process to help you get the best deal possible. Mortgage lending is similar to filling your vehicle with gasoline. The price of gas may be a few pennies cheaper across the street, but you usually will not see a large difference in gas prices on the same block.

How Should I Shop For The Best Mortgage Rates In Today’s Housing Market?

Is shopping for the best rates the smartest way how to shop for a mortgage in today’s housing market? Mortgage lending is the same way. You may find a lender that is a couple of dollars cheaper but rarely will you find a loan that is dramatically cheaper. A lender may offer a slightly lower rate BUT charge you higher fees. We are here to train you to understand the ins and outs of comparing lenders. If a lender is charging too high of a rate, or too excessive of fees, they will not be in business for long. The same is true if the rates and fees are too low. So, the mortgage market does require competition (as well as state and federal regulation).

Compare APR When Shopping For A Mortgage In Today’s Housing Market

The best way how to shop for a mortgage in today’s housing market is to consider many things. There are many things you want to consider besides just interest rates. Depending on your qualifications, you may not qualify for a loan at a large mortgage bank. Many large banks and lending institutions have lender overlays on their mortgage programs. A lender overlay is an additional qualification, above and beyond the agency guideline, which a bank put in place to minimize risk. One of the most common overlays in the mortgage industry is the minimum credit score requirement.

What Is The Minimum Credit Score Do I Need To Get A Mortgage?

Many large banks and lenders will tell you to need a 620 credit score for FHA mortgage lending. This is definitely an overlay because FHA allows credit scores all the way down to 500 (with a 10% down payment). Per the guidelines set forth by the U.S. Department of Housing and Urban Development (HUD), an FHA loan only requires a 580 credit score to have the low 3.5% down payment option. But if you walk into your large bank, they are going to tell you to need a 620 or even a 640 in some cases to qualify (with them). Gustan Cho Associates is a no overlay mortgage lender, so we only require a 580 or greater score to put down 3.5%. And if your score happens to be below 580, you may still qualify for an FHA loan with our team. Click here to get a mortgage with minimum credit score

How To Get A VA Loan With Low Credit Scores

Many veterans run into overlays and become discouraged about buying a house. VA lending can be incredibly confusing with a lot of misleading information on the internet. A VA loan does not have a minimum credit score requirement. So we encourage you to reach out to Gustan Cho Associates about a no overlay VA mortgage loan. Once you find a lender who can approve your qualifications, you then need to make sure you are getting a good deal.

What Does a Loan Estimate Tell You?

When shopping for a home, a lender will send you a legal document called a loan estimate. This three-page document will go over the nuts and bolts of your mortgage loan. Some key pieces of information on the loan estimate are:

  • Your name and address
  • Loan terms such as product type and loan type
  • Confirmation if your interest rate is locked, loan amount
  • Clarification if you have a fixed interest rate or an adjustable-rate
  • Information on prepayment penalties or balloon payments
  • A breakdown of your total monthly payment including taxes, insurance, and any association dues
  • I will also give you an estimate of total cash to bring to the closing table

How To Shop For Mortgage For Best Rates and Terms With The Loan Estimate

The second page of the document is the most important page when comparing lenders. A will go over all lender fees. This is where you can compare your quotes apples to apples. A lender does not have control over the rest of the items on the loan estimate. So letter “A” will go over origination costs, lender fees, and discount points if any (lender fees). Letter “B” will go over services you cannot shop for such as appraisal costs, credit reporting fees, flood documents, and other tax verifications.

What Items Appear on The Loan Estimate?

How to shop for a mortgage in today’s housing market is to make sure you understand all sections of the loan estimate. A home is most people’s largest investment in their lifetime. Letter “C” on the loan estimate will go over the cost of title fees. In most purchase transactions, the seller will pick the title company, so you do not have control over this cost. If you are completing a refinance transaction, you absolutely have the right to shop for any title company you feel comfortable with. Letter “D” on a loan estimate will simply total all costs between “A” and “C”.

What Is The Next Step After The Loan Estimate?
What To Do In The Year Leading Up To Buying a House?


Letter “E” will go over taxes and government fees such as transfer taxes. Letter “F” is your prepaid items such as daily per diem interest, homeowners’ insurance paid in advance, and any property taxes you are responsible for before closing. Letter “G” will start your escrow account. This will impound your property taxes and homeowners’ insurance due in the future. Each month, a portion of your monthly mortgage payment will fill this account. At the beginning of a mortgage loan, you must put enough money in the account to be up to date when the property tax and insurance bills are due next. Letter “H” goes over other costs that may be involved in the transaction such as an owner’s title policy.

How Much Are Closing Costs When Buying a House?

How to shop for a mortgage in today’s housing market is to make sure to know how much you need for the down payment and closing costs. Letters “I” and “J” simply total up all of the closing costs. While this document is confusing, it is a great replacement for the old good faith estimate. This document is designed to help you easily understand the mortgage terms, as well as compare lenders, head to head. For more information on how to read a loan estimate, please see this line ( The third page of the loan estimate does have important information such as the lender and loan officer licensing information.

What Is The APR Versus The Rate Quoted By Mortgage Lenders?

Due to the amount of fraud in the financial industries, please make sure these numbers line up with other documents sent from your loan team. There are direct comparisons of where your loan will be in five years, APR (Annual Percentage Rate), and TIP (Total Interest Percentage). There are other considerations depending on the loan programs such as late payment and fees that will be assessed. This is all broken down on the third page before you (electronically) sign the loan estimate.

How To Shop For a Mortgage In Today’s Housing Market With The Best Lenders and Rates

In 2024, it goes without saying, but you will want to make sure you read reviews on your mortgage lender. Gustan Cho Associates strive to make the mortgage process as easy as possible for our clients. Not every mortgage loan is going to be smooth sailing, especially if there are difficult qualifications to address. But our team is highly trained in unique scenarios. We are available seven days a week to help you with your mortgage needs.

How To Shop For A  Mortgage In Today’s Housing Market With Low Rates and No Discount Points

Our main focus has been on growing the states we offer our no overlay platform in. We will soon be licensed in 48 states so we can help more borrowers across the nation. We would love to put a second set of eyes on your qualifications or get you a highly competitive rate quote and earn your business. Even with all the news about the housing market, buying a home is a great tool to combat inflation. For more clarification on reading a loan estimate or any other mortgage-related question, please call Mike Gracz on (800) 900-8569. You may also send an email to We look forward to helping you refinance your current home or buy your next property! Click here to shop for a mortgae today

This guide on how to shop for a mortgage in today’s housing market was written and published by Mike Gracz of Gustan Cho Associates.

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