Tips on how to choose a mortgage lender
Purchasing a home is full of decisions; one of the first decisions buyers make is their mortgage lender. With the advent of the internet, there are now more lenders than ever before ready and willing to accept your loan application. However, this can make it even more difficult to decide which lender is right for you. The following tips can help you as you prepare to pick your mortgage lender.
- Choose whether or not to use a mortgage broker
There are pros and cons to working with a mortgage broker. Brokers can help you save time by doing the majority of the legwork when it comes to finding lenders; for new buyers or those with busy schedules, this can make the process easier and less time consuming. However, it is important to do your research before hiring a mortgage broker. Less scrupulous brokers will steer their clients towards the lender that will make them the most profit – not the lender that offers the best rates. Asking for references from current clients can give you better information on what using a particular broker will be like.
- Ask your real estate agent for advice
Real estate professionals deal with mortgage preapprovals and applications every day. Because of this, they often have valuable insights onto which lenders are easier – or more difficult – to work with. Ask your real estate agent for recommendations; a reference form a real estate agent is a great ice breaker with a lender, and may even help you reduce closing costs.
- Shop around for different rates
Applying for a mortgage is not a cut-and-dry process; while your financial information is the same, rates and terms of the loan can still vary from lender to lender. Because of this, it is extremely important to shop around for lenders. Even if you love your banking institution, they may not offer you the best loan rates. Shopping around can ensure you get the best loan possible.
- Decide what kind of lender you want
Deciding between a large or a small company can help you find the right lender. Small lenders can offer more personalized service, while large lenders can often provide more competitive interest rates. Researching a variety of companies can help you decide what kind of lender you want.
- Research the lender’s reputation
Do your research on a lender’s reputation before you apply for a mortgage. Make sure to ask lots of questions, including whether or not your mortgage can be sold in the future. Learning as much as you can about a lender can help reduce headaches and hassles in the future.