Typically, one of the first people you meet when your house hunt begins is a real estate agent. Whether you are a first-time homebuyer fresh out of college or moving up to buy your “dream home,” that real estate agent quickly becomes your guide on a long journey that includes unexpected twists and turns. Over time, this person becomes your own personal, trusted real estate expert to whom you direct all of your home purchase questions. But after you’ve fallen in love with that perfect home, picked out the curtains and paint, now comes the second half of the home purchase: getting a mortgage. So, when your real estate agent suggests that you use their “preferred” lender, what does that mean?  Are you obligated in any way to use that lender? Gina Pogol, a mortgage writer for The Mortgage Reports, asks and answers that very question, coming to the following conclusions:

First, note that using the “preferred” lender isn’t necessarily the wrong choice.  This lender likely shares office space with or has a business relationship with your agent.  In fact, there may be benefits to using the lender, such as better communication with your agent, exclusive incentives, and the local expertise that is hard to come by and maybe critical to a successful transaction. In some cases, you are better off looking elsewhere for your mortgage.  While that close communication between lender and agent may promise you a quick closing, it might come with higher lender fees and closing costs.  Additionally, if you are going to utilize a niche product, like a VA loan, you’re likely better off finding a lender specializing in guiding you through the red tape. One thing to remember: you are not under any obligation to use any particular lender, regardless of what your agent says.  Even if you use the “preferred” lender to get a pre-qualification letter to start house hunting, you don’t have to use that lender to secure the mortgage.

Bottom line: do your own shopping and get a quote from more than one lender, including the “preferred” lender your agent may suggest.  For most people, buying a home and taking out hundreds of thousands of dollars in debt is likely the most consequential financial decision you’ll make.  If you’ll comparison shop for groceries, a cell phone, or even a new mattress, doesn’t it make sense to shop for a life-changing mortgage?