Mortgages are almost always the biggest and costliest loans borrowers take out, so getting the best deal matters. Can applying for a mortgage with more than one lender help you find it?

Yes, indeed. Here’s how and why it’s wise to explore multiple offers.

Should you apply for a mortgage with multiple lenders?

Comparison-shopping among multiple mortgage lenders helps you save money. That’s not a truism, it’s a documented fact. Back in 2018, Freddie Mac conducted a large-scale study on the subject, and in February, the mortgage market-maker released follow-up research indicating that borrowers can save $600-$1,200 annually by applying to mortgages from multiple lenders. With the 2022 spike in mortgage rates, Freddie Mac noted, borrowers stand to save even more money each month by finding an interest rate that’s even just slightly lower than their initial offer.

The Consumer Finance Protection Bureau (CFPB) recommends comparing “at least three” lenders to identify a competitive rate. Another study out of the CFPB postulated that if 20 percent of borrowers shopped for one extra quote, they’d collectively save $4 billion a year due to how the market would respond to more consumers making comparisons: by lowering prices.

Best of all, you can compare mortgage rates and APRs easily without having to complete an application, impact your credit, or pay an application fee in most cases.

How to get the best mortgage quotes

1. Check out current mortgage rates

Ahead of getting quotes or applying for a mortgage, do as much research as possible. There is plenty of information out there about current mortgage rates, APRs and fees, and knowing the landscape can help you get a feel for what to expect when you go to obtain an offer.

“It’s smart to shop and compare interest rates and fees. They both will be different from lender to lender,” says Adam Spigelman, senior vice president at Planet Home Lending in Cherry Hill, New Jersey.

While your individual rate will largely be determined by your credit score, this step offers perspective on what rates are like today, and helps you compare fees between lenders and home in (no pun intended) on the ones you’re most interested in — without having to go through the application process.

2. Choose your lenders

While there’s no magic number as to how many mortgage lenders you should get quotes from, the CFPB suggests contacting at least three. Having done your research beforehand, you’ll be able to make a more informed decision as to which three (or more) you’d be comfortable applying with.

Obviously, the numbers are important — but ultimately, when it’s time to pull the trigger, choose lenders and loan officers you’d want to work with (all other things being roughly equal, of course).

“Find a mortgage originator you like and trust, and stick with them,” says Mike Carpenter, a senior mortgage loan originator at Kirkland, Washington-based Washington First Mortgage Loan Corp.

3. Understand all application costs

Many mortgage lenders charge an application fee when you apply for a loan, which can run up to several hundred dollars and is usually non-refundable. If your goal in applying for multiple mortgages is to save money, then it might not make sense to spend a wad with several lenders.

If a lender does have a fee and you’re set on applying for a loan, ask if it can be waived or reduced. The lender might be open to negotiating with you.

“While most lenders won’t tell you an application fee is negotiable, it does tend to be one of the few costs associated with obtaining a mortgage that can be flexible, or waived,” says Lauren Anastasio, a senior certified financial planner with Vanguard.

Keep in mind that the application fee might be called something other than “application fee.” Some lenders might claim to not have an application fee, but they’ll charge something that’s virtually the same thing, like an origination fee, Anastasio points out. Others might waive the application fee but impose a higher underwriting fee.

Be aware of “junk” fees, as well, which are added costs lenders might tack on. For example, you might find two line items on your loan estimate that cover the same thing, such as an “origination” and “broker” fee. If you spot this, ask for clarification.

Here are a few other possible junk fees to watch for:

• Processing fee
• Document preparation fee
• Administrative fee
• Email fees
• Miscellaneous fee

Of course, there are several costs commonly associated with getting a mortgage, including charges for an appraisal, credit check and title services. It’s important to understand all of these fees ahead of time, so you know exactly how much the loan costs, and potentially have some leverage negotiating with lenders.

4. Gather necessary documentation

When you apply for a mortgage, you’ll need to provide the lender with information about your employment history, income and any assets and debt you have. Before you get quotes or apply for multiple loans, gather this paperwork, including pay stubs and W-2s.

In addition, consider creating a separate email account. When you apply for multiple mortgages, you might get bombarded with a slew of sales pitches, follow-up emails, calls and texts. With a dedicated inbox, these communications can land there.

5. Get preapproved or prequalified

If you don’t want to pay application fees (or go through with your applications just yet), you can get preapproved or prequalified for loans instead, typically at no charge.

A mortgage prequalification is a basic assessment of you as a borrower, and can give you an idea of what you might qualify for.

A preapproval, however, involves a more thorough evaluation of your credit and finances, so you might still be charged a fee to go through this process. Some lenders remove the fee as a courtesy (and a way to entice you to borrow with them), so it doesn’t hurt to ask if it can be waived.

Preapproval letters are only valid for a short window, usually 60 to 90 days. Some are only good for 30 or 45 days. Keep this timeline in mind as you go through the process.

Will multiple mortgage applications affect my credit score?

When you apply for a mortgage, the lender pulls your credit report to help in its decision to approve or deny your loan. This is considered a “hard” inquiry, which can lower your credit score — temporarily, at least. Several hard inquiries within a short time frame in particular can be damaging,  suggesting that you’re going on a shopping spree or desperately scrounging for funds.

However, exceptions are made in the case of mortgage lenders. Credit scoring models take mortgage rate-shopping into account and group multiple inquiries together as one, if these inquiries all take place within a 45-day period. These credit pulls typically stay on your credit report for two years before dropping off.

“There will be a record of multiple credit inquiries if you do apply with multiple lenders, but there should be little to no impact on your credit score from those inquiries and it shouldn’t discourage you from speaking with multiple lenders until you find the right fit,” Anastasio says.

One tactic you could try to avoid dinging your credit too much is to get your free credit report from each of the three major credit bureaus: Experian, TransUnion and Equifax. You can request your reports through AnnualCreditReport.com.

Then, determine which agency has your middle score, and see if a lender would accept your sending that credit report instead of doing a hard pull themselves, Carpenter says. The lender can then use that report to offer you a mortgage preapproval.