There’s no reason not to accept your bank’s mortgage offer, but you should shop around first, says Greg McBride, CFA, Bankrate chief financial analyst. “There isn’t a one-size-fits-all answer, but the best way to find out is to undertake the same comparison-shopping process you otherwise would, and the cream will rise to the top,” McBride says.
After all, a quarter-point discount off a rate that is half a point higher than you can find elsewhere doesn’t do you much good. “But getting a quarter-point discount or a break on closing costs with an otherwise competitive rate definitely tips the scales in that direction,” McBride says.
In some cases, shopping around can lead your bank to offer you a better deal. Andrews says he recently worked with a borrower who had asked his credit union for a lower rate on a mortgage. The credit union didn’t respond until it realized the borrower had enlisted Andrews to shop for a new loan.