Refinancing calls for many valid mortgage quotes

How many price quotes should I get in refinancing my mortgage?

Get as many valid quotes as possible. Two or three help. Valid price quotes must meet three major conditions:

• Same market timing: All quotes must be as of the same day, since mortgage lenders reset prices every morning.

• Same transaction features: Valid price quotes are based on the same assumptions regarding the features of your transaction that affect price. These include the loan amount, property value, type of property, zip code of property, lock period, whether or not you are waiving escrow, your FICO score and whether you are occupying the house or renting it. And on a refinance, you must indicate whether you are taking any cash out of the transaction.

If you don’t specify all these factors, the lender will probably assume the best so the price quote will be as low as possible. For example, if your home is a duplex, which usually commands a higher price, and you don’t indicate it in soliciting a price quote, the lender will assume it is a single-family home because that commands the lowest price.

• Absence of lowballing: Even if you specify all relevant transaction features, some loan officers will quote a price below the price they could actually deliver that day, a process called lowballing. The purpose is to win the bidding contest so you will come back.

If you do come back, the lowball price quote will be explained away either by changes in the market since the original quote, or by trans- action features that you neglected to mention when you solicited the original quote.