How to Pick the Right Lender

Finding the right lender for your mortgage can be daunting. Particularly if this is your first time buying a home. Don’t be in the dark when making this important decision. Read through some of the helpful tips below so you know what expect and how to pick the best possible plans, rates, and company for you.

Find a Lender Before you Find Your Dream Home

This isn’t something to put off. A pre-approval letter can be what is keeping sellers from choosing your offer on your dream home. If the home you want is desirable, well located, and fairly priced; chances are there will be other offers involved. Make your offer the strongest it can be by getting pre-approval! In order to do this, you need to know what kind of loans you qualify for, find a lender, and submit an application.

Find Out if you are Qualified

Understanding where you are at financially is crucial when picking a mortgage company. The higher your credit score the more options you will have when finding the right lender and loan. Look at the minimum credit requirements for your bank and other mortgage lenders. You can find several mortgage calculators online that can give you a decent idea of what you will be spending monthly and annually, but you will still need to call to receive the most accurate estimates.

Know Your Lender Options

There are several different types of lenders including credit unions, mortgage bankers, correspondent lenders, savings and loans, and mutual saving. If you have near perfect credit, your bank is usually your best option when finding the best rate. When your credit is not up to par, you can compare the rates of different mortgage companies. There is no loan program that is one size fits all. Your lender should be asking questions about your needs to decipher the best plan for you. It’s not just about the interest rate. Some loan officers are very complacent and are not looking at individual situations and needs. When weighing out their pros and cons, investigate their credibility by looking at online reviews and asking specific questions.

Ask Questions and Compare

Create a decent list of a couple different lenders referred to you by friends, family, and lenders you found online. Take the time to call and compare an array of lenders. Examine different interest rates, the points/origination fees, and the total of all other lender fees. Ask about their effectiveness and see how they connect with their customers. Make sure they are asking you questions too. They need to know what kind of mortgage will fit your current and future plans. Check out this list of questions below:

  • Do you mainly communicate with clients via email, text, phone calls or in person?
  • How quickly do you follow up to messages?
  • How much time will it take for preapproval, appraisal, and closing?
  • Do you guarantee on-time closings?
  • What kind of loans does your company offer? Which ones do I qualify for?
  • What would be my interest rate and annual percentage rate?
  • What will be my monthly payment?
  • How much will I need to put down?
  • What lender fees and costs will I need to cover?
  • When buying a home you’re in it for the long haul. Don’t be afraid to ask questions and don’t hesitate to ask lenders to explain fees and policies in further detail. You will be glad you shopped around and picked the right lender to work with for the next 15, 20, or 30 years.

    By | 2018-12-05T19:44:42-06:00 December 5th, 2018|Finance, General Advice, General Questions|