How to Select a Mortgage Lender
Among the most crucial decisions you will probably make when it comes to your home mortgage is which lender to select. Nowadays, there are almost countless mortgage lenders all happy and ready to take your loan application. But that hardly means that their offer is automatically the best you’ll find.
Below are five tips for choosing a good mortgage lender:
1. Decide if you will work with a mortgage broker.
Working with a mortgage broker comes with benefits. A broker saves you time and energy by taking care of a big portion of the work of finding lenders. But there are disadvantages as well, like when they go for the lender that gives them the biggest profit, even if it’s not in your best interest to pick that lender.
If you decide that you need a broker, take the time to do a bit of research. Ask for references and let other homeowners help you decide by listening to their stories about the broker you’re planning to hire. Brokers who refuse to provide references from their past clients should be avoided simply because they are most probably hiding something.
2. Know what type of lender works best for you.
Are you thinking of a small lender or a large company? If you want personalized customer service and a lender that actually knows your name, you would probably want to choose a smaller lender with a great reputation in your area. If you’re more concerned about getting the best interest rate, then consider a bigger lender. Understanding the differences among lenders of various types and sizes will help you find the one that is perfect for you.
3. Ask for personal recommendations.
Obviously, a broker is not your only way of finding mortgage lenders. Ask for personal recommendations from friends, relatives or colleagues who might have purchased a home in recent years. This is a good way to cut through the sea of prospective mortgage lenders out there.
4. Talk to your agent.
Good agents do not limit their recommendations to their in-house lenders, and good loan officers provide good care to customers who come to them on an agent’s recommendation. Take full advantage of this, and be sure that the lender you speak to, knows that your agent recommended them to you. This can not only serve as an good icebreaker, but it can also work to your favor in terms of reducing closing costs.
5. Choose a lender with a good reputation.
Finally, regardless of what you hear about a lender, always do a background check.
Lastly, no matter what great things you heard about a lender, whether from family or friends or online, a background check is imperative. Know as much as you can about the company, if only to save you headaches later on.