Minneapolis, MN: Smart people know to shop at least a few mortgage lenders when buying or refinance a home. The typical search these days is done on the internet via your favorite search engine.
You are quickly bombarded with results like Best Mortgage Lender, Top Mortgage Lenders, 10 Best Mortgage Lenders, Best Online lenders, Best Mortgage Rates, Best VA Lenders, Best FHA Lenders, Top Mortgage Brokers, and more. All results are from suspect web sites, and never from any reputable site.
Clicking on most of those links sadly does not bring you to any sort of unbiased accurate ranking of mortgage companies.
Instead, most bring you to sites that appear to rank lenders, but in reality, are phony paid advertising web site that always seem to show the same pack of big internet lenders. As you click these links, the web site owner makes money under a PPC (pay per click) scheme, or the lender pays a fee to the web site to advertise.
To make it worse, many of the sites advertise extremely inaccurate rates, or rates loaded with a bunch of additional closing costs and discount points to buy down the real rate that most people do not want to pay, or they show things like a 10-year rate, while letting you assume it is a standard 30-year interest rate.
Advertising this way is not cheap.
All mortgage interest rates are essentially based on the same mortgage-backed security bond market everyday. All lenders also have to pass along the same third part closing costs fees, like appraisals, credit reports, recording fees, and title company costs.
Adding hundreds of thousands to millions of dollars in click-bait advertising has to be paid. You the client always pay it, and the only way for the lender to recoup the high advertising costs is to charge you higher rates and fees.
Next, most of these sites are also paying big dollars to the major search engines to buy top placement in your search, ahead of generic free listings. Paid ad words can get extremely expensive. I just searched a major search engine and found the term “VA Mortgage Rates” currently costs advertisers $9.26 PER CLICK to get their ad on page one of your search results.
What is really your best lender?
While there are many variables that come into play, the answer proven time and time again is that your best purchase and refinance mortgage loan option is usually your local mortgage broker, while the worst are usually the gigantic internet lenders and big banks.
Don’t make the mistake of picking the wrong best mortgage lender based off phony mortgage lender ranking sites Avoid the higher costs passed along with all the advertising, and shop with the local guy down the street for the best service, best rates, and lowest closing costs.