How to Choose the Right Mortgage Lender
One of the first steps to purchasing a home is choosing the right lender for your needs. There are a variety of mortgage lenders out there, each offering different products and services. Many people may think you should go straight for the mortgage lender that offers you the best rate, but there are many other factors to consider. It’s important to choose the lender that’s best suited to meet your particular needs.
Talk to Other People
Often, a great way to find a lender is to ask for recommendations from friends and family. Check with people you know who’ve recently purchased a home or who may have contacts in the real estate business. Ask what they loved, what they wish they would have known, and if they’d recommend who they used to get their mortgage. Ask business professionals you know like your attorney, your financial planner, or your accountant if they have a mortgage lender they think of highly.
Interview and Ask Questions
Before making a lender candidate list, feel free to ask lots of questions. You don’t have to apply for a loan to interview them. Whether you’re considering working directly with a mortgage lender, a bank, or a credit union, ask about specific experience, turnaround times, and rate-lock options.
Make a list of questions you plan to ask each lender, and make sure you understand the answers they offer. Find out about their fees, how they get paid, loan details, and lock-in periods. Ask for a Good Faith Estimate.
Get the interest rates on the different loans each lender offers. Make yourself a chart to compare the interest rates and mortgage terms. Check to see who will be handling your loan once the application process is finished. Some lenders will remain the account executive after you start your mortgages, others may hand your loan to a different company. This can be important to check on beforehand, especially if you prefer to work with someone local.
Consider Customer Service
Buying a home will likely be one of the most significant purchases you’ll ever make in your lifetime. You’ll want to make sure that you have confidence in the individuals helping you through the mortgage finance process. You also want to know that all of your questions will be answered in a knowledgeable and timely manner. You shouldn’t need to worry about harassing the lender to find out the status of your loan. Always consider the customer service you’ll receive from your lender.
When you call your interview list, ask yourself “Do they seem competent and informative?” “Do they ask the right questions?” Also, were you ever on hold for a long period of time? Or if your call wasn’t answered right away, do they return your call in a timely manner? Do you feel rushed or pressured? How you are treated and how you feel during these beginning stages are a good indicator of how the rest of the process will go.
Compare the Mortgage Financing Details
Ultimately the biggest thing on your mind will be, “What’s this home loan going to cost me?” You may have received several estimates that range in closing cost totals, but keep in mind that those totals are just that — estimates.
Once you’ve narrowed down your mortgage home loan candidates, contact each one to get information on the financial specifics. The three main things to compare are lender fees (application or underwriting fees, origination charges, etc.), discount points, and interest rates. You will want to remember that rates can change daily, sometimes even multiple times a day, so comparing rates from lenders on different days could show variations that are a result of the market, rather than differences between the lenders.
It is a good idea to check on lock-in rates, so that you can compare apples to apples. Different programs, loan amounts, sales prices, etc., will result in different numbers.
Finding the right home is the most important part of buying a house. Finding the right mortgage is just as important to set a solid foundation for successful homeownership. Robins Financial offers a variety of mortgage loan options, as well as expertise to help you with the decisions you need to make along the way.
Not sure if you’re ready to buy a house? Want to see how much you can afford and what monthly payments might look like? Robins Financial offers Home Buying Calculators to help you find the answer to these questions and more.