1. Give each lender the same assignment
A mortgage advertisement is a conversation starter. A useful comparison needs specific written offers. CFPB recommends requesting Loan Estimates from multiple lenders once you have a particular home in mind. Start by writing one brief: purchase price, borrowing amount, down payment, occupancy, loan program, term, and whether you want a fixed or adjustable rate. Ask each lender to price that scenario.
Keep the estimates close together in time because market pricing changes. Record the issue date and whether each offer is locked. If one lender presents a different term or a different points allowance, flag it as a separate option. An unmatched quote is not useless; it simply cannot answer the same comparison question.
2. Read the interest rate and APR together
The interest rate describes the annual interest charge on borrowing. APR is a broader measure that also reflects certain loan charges, including points and mortgage-broker fees. Find the interest rate on page 1 of the Loan Estimate and APR on page 3. A gap between them is a reason to examine charges, rather than a reason to discard either number.
APR is not a substitute for understanding the product. CFPB cautions against simple APR comparisons between fixed and adjustable loans. An adjustable loan's APR does not show its maximum possible interest rate. Ask about adjustment timing, limits, and possible payments before treating its initial rate as a durable household expense.
3. Price points and lender credits as deliberate tradeoffs
Discount points generally exchange more money at closing for a lower interest rate. One point equals 1% of the loan amount: on a hypothetical $300,000 loan, that is $3,000. There is no universal amount by which one point reduces a rate. Lender credits can work in the other direction, reducing upfront costs in exchange for a higher rate. Some credits have other explanations, so ask what each one represents.
Request an option without discount points or rate-linked credits, then compare alternatives. A rough screening calculation divides extra upfront cost by monthly payment savings. Hypothetically, $2,400 divided by $40 equals 60 months. That is arithmetic, not a complete break-even analysis: it omits timing, remaining balances, taxes, and other differences. Ask the lender for total-cost comparisons over several plausible periods.
4. Copy the offers into one worksheet
Our worksheet turns the CFPB's comparison categories into a record you can bring to a lender discussion. Add columns for each offer. Keep page references beside the figures so you can trace every number back to the actual document. Leave missing information visibly blank and request it.
| Record for each offer | Where to look or what to request |
|---|---|
| Matching scenario and issue date | Loan amount, program, term, fixed/adjustable structure, down payment, and estimate date |
| Rate, APR, and lock | Pages 1 and 3; written lock expiration and extension terms |
| Points and lender-controlled costs | Page 2: Section A, Section B, and lender credits in Section J |
| Monthly obligations | Principal/interest, mortgage insurance, escrow, and costs paid separately |
| Cash to close | Page 2 calculation; explain deposits, credits, and other adjustments |
| Five-year borrowing cost | Page 3: first In 5 years figure minus principal paid off |
| Open questions | Who answers them, response date, and revised estimate requested |
5. Do not confuse a lower estimate with a cheaper lender
Compare charges the lender controls, including origination charges, required services you cannot shop for, and lender credits. Check other estimates too. A lender has not made property taxes cheaper by entering a smaller tax estimate. Reconcile taxes, insurance, prepaids, and initial escrow when the same property produces materially different figures.
The page 3 five-year calculation offers one common comparison period: subtract principal paid off from total paid to obtain the listed interest-and-fee cost. It is not a prediction that you will sell or refinance after five years. For an adjustable loan, CFPB notes that the calculation assumes unchanged rates; actual borrowing costs can be higher.
6. Confirm the lock and the closing plan in writing
A rate lock is conditional on its specified period and application details. Receiving a Loan Estimate does not automatically mean the rate is locked. Confirm the expiration, costs, extension policy, and what happens if the closing is delayed or your application changes. Also ask what happens if market rates fall; a lower rate is not automatically available after locking.
Finally, compare responsiveness and the lender's ability to meet your contract timeline. Bring unexplained differences back to the lenders before choosing. This is general U.S. mortgage education, checked October 18, 2026; individual products and eligibility vary. A HUD-approved housing counselor can help you work through the decision. No advertised rate here is a personal offer.
A couple of useful answers.
Does the lowest mortgage rate always mean the cheapest offer?
No. Points, fees, loan structure, the time you keep the loan, and other costs matter. Compare matching written Loan Estimates and ask lenders to explain the tradeoffs.
How much does one discount point lower a mortgage rate?
There is no fixed reduction. One point costs 1% of the loan amount; the rate reduction depends on the specific lender, loan, and market pricing.
Is the rate locked when I receive a Loan Estimate?
Not necessarily. Check the lock indication on page 1 and get the expiration and conditions in writing.
Sources & further reading
Source material checked October 18, 2026. Loan offers, program terms and local requirements can change.
CFPB: choosing a loan offer ↗CFPB: mortgage interest rate versus APR ↗CFPB: lender credits and discount points ↗CFPB: compare and negotiate Loan Estimates ↗CFPB: what a mortgage rate lock does and does not cover ↗CFPB: Loan Estimate explainer ↗Research-based guidance. How we publish and review our work
