Shop the Loan price not the rate --what does that mean?

Loan price is the rate plus the lender fees for that rate

Lenders who play the rate game know nearly everyone focuses on the rate and/or the annual percentage rate (APR).  Because that's what the online pundits tell people to do!  But only paying attention to the rate allows these unscrupulous lenders to use misleading tactics to trick and confuse by quoting low rates and APRs, while minimizing details on the lender fee you would pay for that rate.

To give you an example, here is a legitimate 30 year fixed conventional loan rate offering from a well known lender (as of April 2, 2026) for a $400k loan amount

• 5.99%  zero lender fees monthly PI $2398 APR 6.034%

• 5.50%  $7000 lender fees PI $2271 ($127 less) 5.696% APR

At first glance, everyone would think a 5.5% rate is the best way to go with a lower rate and APR----but... that $7k in lender fees to get that half percent cheaper rate will take 55 months (at $127 a month) before taking the lower rate option pays for itself.  This is called the "break even" of the loan price.  With the idea rates are likely to improve in the next couple of years offering a lower rate to refi to, that extra lender fee paid for the lower rate is wasted money.

And to explain further--here are my rates for the same loan:

• 5.99% -- 5.99% APR -$3k lender credit back to you for other closing costs (I'm $3k lower on the lender fee than this "well known" lender)

• 5.50%  $3k in lender fees 5.603% APR (I'm $4k less than this lender for the same rate)

So you see, just concentrating on the rate and APR is misleading.  And

the difference in loan pricing from a well connected mortgage broker who owns his own company (like me) with much less overhead, is pretty substantial--and can save you money.  Some super lenders like Rocket, NewDay, Loan Depot, Fairway Mortgage, among others, have even worse loan pricing than what's displayed above.  They have huge overhead with massive ad budgets, and use their name recognition as a bludgeon to get borrowers to accept their loan pricing.

What's the best way to rate shop?

Talk to and then work with a well connected mortgage broker (like me), who will show you how rate, APR and the loan price all fit together.  That way you can make the best choice for your situation.  And save thousands of dollars in the process!