And Why That “Great Deal” Could Cost You Thousands

This is one of the most financially dangerous mistakes homebuyers make — and it happens all the time. We’ve seen too many buyers trust the first loan offer they get, only to end up with a rate that’s nowhere near what they thought they were getting. The result? They pay thousands (even tens of thousands) more over the life of the loan — and they never saw it coming.

So let’s be clear:
Always get a second opinion on your mortgage loan quote. Period.

That means:

  • Don’t automatically go with the lender your agent “always works with.”
  • Don’t assume your credit union or bank has the best offer.
  • Don’t trust a verbal quote or a vague “today’s rate is 6.25%.”

Get it in writing. And compare it.

Everyone in the transaction wants you to close — not necessarily get the best deal.

We want to believe everyone in a real estate transaction is looking out for us, and many of them are. But everyone — the agent, the lender, the broker, the title company — gets paid when you close. That creates an unspoken pressure to “get the deal done,” even if it’s not always in your best financial interest.

So when someone recommends a lender, it might be someone they know, or someone fast, or someone who makes the deal easy. That’s not the same as someone who gives you the best loan terms.

Rates change constantly — and lenders have different programs.

Mortgage programs and interest rates fluctuate — sometimes hourly. And not every lender has access to the same programs. Some lenders specialize in FHA or VA. Others may have portfolio products, grant programs, or lower credit score options. Some might have lender-paid PMI or down payment assistance. These differences matter.

Here’s where buyers go wrong:

  • They assume the first lender they speak with has the best program.
  • They don’t compare Loan Estimates side by side.
  • Or worse — they don’t understand how to compare them.

That mistake can easily cost you $100–$400 per month in extra payments — for decades.

WARNING: Don’t tank your credit score while shopping around.

Here’s the catch. Shopping for a mortgage means lenders pull your credit. Each time your credit is pulled, it creates what’s called a hard inquiry. And too many hard inquiries in a short period can actually start dropping your credit score — usually within just a few points per inquiry.

And if your score drops far enough, guess what happens?

You no longer qualify for the better loan programs and rates.
You get bumped into the “less favorable” bracket.
Now you’re paying more — and you did it to yourself by shopping the wrong way.

So yes — shop for your mortgage, but do it the right way.

The House Karma Way: How to Shop Smart Without Hurting Your Score

At House Karma, we’ve partnered with a real-time rate comparison platform — the same one that powers national lender networks. It’s not some generic calculator. It’s the same data used by professionals to quote loans at the wholesale level.

With it, you can:

  • Instantly compare live mortgage rates from hundreds of lenders.
  • Filter by loan type, credit score, down payment, and more.
  • Get a real-world benchmark before you let anyone pull your credit.

Once you know what the best rates and programs are, you can confidently go to your lender of choice and say:

“Here’s the national benchmark. Can you match it — or beat it?”

If they can’t? Walk away.

BEWARE: Bait-and-Switch Lenders Are Still Out There.

We wish this wasn’t the case, but it is. Some loan officers will quote you an amazing rate up front — a teaser rate — to lock you into working with them. You feel good, you get under contract, you get close to closing…

Then suddenly:

“Oops, the rate went up.”
“Oops, your credit score dropped.”
“Oops, you didn’t qualify for that program after all.”
“But we can still close — just at 0.5% higher than we discussed…”

At this point, you’ve already paid for your appraisal. You’ve already packed. You’re days from moving. What are you going to do? Most buyers have no choice but to close — and they eat that higher rate.

Over 30 years, that half a percent difference could cost you $30,000–$50,000.

How to Protect Yourself (Even If You Already Chose a Lender)

Here’s what you need to do:

  1. Get multiple Loan Estimates in writing — not just a verbal quote.
  2. Use House Karma’s free rate tool to benchmark current retail rates nationally.
  3. Understand what makes up a loan quote:
    • Base rate
    • Points (also known as discount points — prepaid interest)
    • Lender fees
    • PMI
    • APR (the real comparison number)
  4. Ask about rate locks. Get it in writing. How long is it locked for? What happens if it expires?
  5. Avoid any lender that can’t explain your rate or fees clearly.
  6. Watch for junk fees. If they’re tacking on unnecessary charges like processing, admin, or excessive underwriting fees, ask why. Then compare.

At House Karma, We’ll Help You Compare. No Pressure. No BS.

We’re not here to sell you a loan. We’re here to protect you from getting taken advantage of.

We’ll help you:

  • Compare offers the right way
  • Avoid unnecessary credit pulls
  • Spot red flags in loan estimates
  • Ask the right questions

This is likely the biggest financial decision of your life. Please don’t make it based on trust alone. Shop smart. Ask questions. Know the tricks — and protect yourself.

Bottom line:
Don’t just ask if it’s a “good rate.” Ask if it’s the right loan, from the right lender, with the right terms — and if you’ll still get that rate the day you close.

If you have questions, we’re here. We’re House Karma. And we don’t just care about helping you buy a home. We care about you doing it right.