How to Select a Mortgage Lender
One of the biggest decisions you will make in relation to your home mortgage is which lender to choose. Nowadays, there are almost countless mortgage lenders all happy and ready to take your loan application. But that doesn’t necessarily mean that they can offer you a great deal.
Below are five tips for choosing a good mortgage lender:
1. Decide if you will use 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 to work with a broker, research is a must. 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 the kind of lender you need.
Do you prefer a small lending company or a big one? If you’re looking for personalized service, go with a smaller lender that has a good reputation in your community. If you’re more concerned about getting the best interest rate, then consider a bigger lender. Knowing the differences among lenders of different types and sizes will help you determine which one is particularly best for you.
3. Ask for personal recommendations.
Definitely, it’s possible for you to find mortgage lenders without the help of brokers. Seek referrals from people you know – friends, relatives, coworkers, etc. – who may have bought a home recently. 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 advantage of this, and make sure the lender you come up to is aware that they were personally recommended by our agent. This will not only be a nice icebreaker, but it can help you in terms of reducing closing costs.
5. Pick a lender with a positive 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.