You’ve decided that you’re ready to purchase a home. You’ve probably figured out already that the first step is getting pre-approved for a mortgage but, how do you determine who is the best to use?
Lenders compete for your business and will do what it takes to earn it. Being a qualified buyer, your lender should treat you like their #1 priority. Sure…they have other clients. You do not need to be reminded of that or made to feel like you’re an inconvenience. It’s time to find another lender if that’s the case.
Here are a few tips to help you choose a lender
1: Interview more than one lender
I understand that you may know someone down at your local bank but, you may be selling yourself short if you do not check what other sources have to offer. Be upfront with them that you’re shopping around. You want to get the best loan program, interest rate and lowest closing costs but, also ask what the lenders typical estimated time frame is to close. Communication is VERY important as well. Do they have good communication habits? If a lender takes days to respond, that could delay closing and add on additional fees.
2: Ask for recommendations from friends, family, and your Realtor.
Reach out to people you know. Chances are, if someone you know has had a good experience with a lender you most likely will too. Ask your Realtor. We work closely with lenders on each deal and will be able to provide you with recommendations for those that provide the best loan programs, rates and amazing service. We also know those who are an absolute nightmare.
3: Choosing a Mortgage Broker vs. a Bank
What is the difference between working with a mortgage broker and a traditional lender such as a bank? Though the end result is the same – providing a mortgage on your new home – mortgage brokers and banks do have differences. The below bullet points are not blanket statements and every point doesn’t necessarily apply in all situations.
- Can shop around with multiple lenders to find the best deal for the borrower
- More flexible lending practices
- Often a quicker close than a traditional bank
- If you already hold other accounts at a bank, you may get special benefits when applying for a mortgage
- More conservative lending practices
- One stop shop for all financial needs (mortgage, checking, savings, etc.)
- Lengthier processing time, meaning a slower close.
Online vs. Brick & Mortar
Online lenders are structured as both bankers and brokers. The only difference is, all of their business is conducted online. You will not meet face to face with your loan officer and you will securely submit all of your loan documents electronically. Your only source of communication is phone and email. If you choose an online company be absolutely sure that someone will be readily available to you.
You may also choose a local lender, either a broker or bank, that has a brick & mortar location. A brick & mortar location allows you the ability to meet face to face with your mortgage professional, as well as visit if any issues arise during the transaction process.
4: Compare Apples to Apples
When comparing loan programs from several sources, it’s a good idea to make sure you are comparing apples to apples as far as loan programs go. If this isn’t possible, make sure you thoroughly understand the difference with each product.