Now that I have been thru both the purchase loan and refinancing process, I feel I am eligible to discuss two mortgage comparison shopping services I used: LendingTree and BankRate.

For the record, when I purchased my house back in August, I found my mortgage broker thru LendingTree.com and got a nice deal of 4.25% 7/23 balloon loan. I recently followed the lead of BankRate to close refinancing of 3.5% 5/1 ARM with EverBank.

Service and Rate Competitiveness

LendingTree allows you to submit one application and get multiple loan offers in hours. Offers are tailored to one's needs, and you can be sure that lenders already read your credit score before sending the offer. You may need to spend 15 minutes to fill up a multi-page application form, but benefit is if you choose one of the LendingTree offers, your lender already has most of your information and do not need to ask that again.

On the other hand, as lenders need to pay money to LendingTree as the middleman, their quoted rate may be higher than what you will get by directly getting to them. Another evidence is in my limited number of tries, the offer I got can differ by as much as half percentage points.

BankRate shows you all the best rates in the market, but does not guarantee that you will be eligible for any of them. Still, as BankRate mostly earns a listing fee instead of commission, one can expect to get the most favorable rate.

You can get a BankRate report in seconds (just choose your loan type, state, products and you are all set). As BankRate does not collect any of your personal information, you should expect to fill up forms at lender's web sites. It can take some time if you need to go to several lenders.

Closing Cost Transparency

Closing cost is very important in purchase loan or refinancing. First, a lower rate with a high closing cost may not necessarily be a better deal than a high rate with a low closing cost. Second, because how law is written, any closing cost estimate is not binding. There are numerous discussions, like this one in MSN Money, in this topic.

To its credit, LendingTree helps to compare closing costs head-to-head in one page. BankRate users do not have any visibility on the closing cost and it is up to its user to go to each lender to get the details.

However, I am not aware that LendingTree can mitigate your risk of surprising last-minute closing cost hike. Instead, LendingTree's main competitor, ELoan.com, does guarantee that the non-recurring part of the closing costs.

(Anyway, for refinancing, one can always back off from the deal (before three days after the closing), so the worst case is to cancel the deal and move on.)

Summary

Actually, after my recent refinancing experience, I will recommend BankRate more than LendingTree. I feel BankRate is more suitable for people like me who like to spend my time on personal finance, and are willing to try out things. LendingTree also has its value, especially for those who do not have much time, but it may not yield the best deal you can get in the market. You should also consider Eloan.com if you want to limit your exposure on closing costs.

P.S. This is the Part III of my post-mortem refinancing series. Check out the other parts, too:

Refinancing Closed, Part I: Closing Details
Refinancing Closed, Part II: A Sweet Deal