Tips for Choosing a Mortgage Lender

It’s important that you’re happy with the mortgage company you go with to purchase your home because you’ll be hearing from them for a long time - potentially 30 years! With the cost of a home purchase potentially being one of the largest investments you’ll make in your lifetime, it’s important that you get the best bang for your buck.

In this article, we’ll discuss some important tips for choosing a mortgage lender that may help you in the process of buying a home.

See Who’s Out There

Before jumping head-on into getting to know any particular mortgage lenders (and certainly before committing to any!) get a feel for who’s out there first. Ask around with friends and family about who they used and do some internet searches and look for who’s being recommended in your area. Anyone who catches your interest should be written down on a list for further research and evaluation. Don’t worry about investigating them just yet.

Make a Short List

Now, it’s time to narrow down the list you’ve made of potential mortgage lenders; you’ll further research those that make your short list. In order to construct this list, it’s time to consider things a little more closely:

• Which mortgage lenders offer the loan types you are interested in?
• What are the credit score requirements for each lender and with their available loans?
• What mortgage rates is each lender currently extending to borrowers?
• What type of lender is it: broker, lender, retail lender, portfolio lender, wholesale lender, correspondent lender, hard money lender?

Finding out the answers to these questions can help you quickly eliminate the lenders you know you don’t want to work with, or that may not be able to offer you the type of loan you’re looking for.

Read Reviews

As with any big decision, learning more about other people’s experiences can be very useful in helping you make a choice. Take your mortgage lender short list and begin doing internet searches for reviews; don’t just pay attention to the positive reviews, really read the negative reviews as well. It’s important to look at both positive and negative sides equally so you can get a balanced look at the lender. Also, don’t be shy about calling the mortgage company and asking for references that you can speak to about their experience.

Decide What’s Important to You

It’s time to compare notes on the lenders you’ve done your research on. During this phase, you should consider what’s most important to you in a lender:

• Competitive mortgage rates
• Experience
• Customer experience
• Locality
• Spectrum of loan programs available

The priority of the areas listed above will vary according to the borrower; you just need to decide what is most important to you and your borrowing situation. Who do you feel has a chance of getting you where you need to go?

Compare Loan Quotes

Before making your final decision, you should compare several loan quotes between vendors so you can see exactly what they are willing to offer. Doing this should give you an idea of the variations in terms that each lender is willing to give, what the lowest APR is, and what your monthly mortgage payment is expected to be. You should be able to really narrow your list down entirely or almost entirely at this point.

Get Pre Approved

Once you know who you want to potentially work with for your loan, it’s time to get a pre-approval with the lender to make sure they want to work with you too and that you can truly get the terms you are wanting. If you don’t get pre-approved at this point, you’ll want to pay attention to why so that you know if there is something you need to fix in your finances or if you should instead try working with another lender.