Choosing a Mortgage Lender
Buying a house is a major investment that requires careful consideration and planning. One of the most important decisions you’ll make in the home buying process is choosing a mortgage lender. With so many options available, it can become overwhelming quickly. Here, we’ve compiled a guide to choosing a mortgage lender to help you reach a decision that best suits your needs.
What is a Mortgage Lender?
Most home buyers do not have the full funding to pay for their home purchase in cash. That’s why they must rely upon the services of a mortgage lender. A mortgage lender is a company or financial institution that lends the money home buyers need to cover the purchase amount.
Types of Mortgage Lenders
When choosing a mortgage lender, you’ll first need to decide on a type of lender. Your primary options include:
- Your current financial institution, such as a bank or credit union
- Another financial institution
- A retail/direct lender that sells loans directly to clients
- A portfolio lender, that originates and funds loans from their clients’ financial account deposits
You can also avail yourself of the services of a mortgage broker, who will act as an intermediary between lenders and borrowers.
Research Lenders
Next, you’ll need to research potential lenders. You can start by asking family and friends who’ve recently purchased a home for recommendations of lenders, or to learn about the hardships they experienced with their lender along the way. Check out online ratings and reviews as well. As you do your research, look for excellent customer service, reasonable closing costs and fees, transparency about the loan process and, of course, current loan rates.
Once you’ve narrowed down your options to just a few potential lenders, you can begin reaching out to them to find out more about their mortgage options. Here are some questions you may want to ask potential lenders:
- How long can I expect the mortgage (pre)approval process to take?
- What kind of loan and interest rate can I expect with my current income and debt?
- Can I see a good faith estimate immediately?
- What kind of mortgages do you provide?
- Will you sell my mortgage loan to another provider after closing?
Weigh your Options
Once you have the details you need about your list of potential lenders, you’re ready to make your choice. As you weigh your options, be sure to look at the full picture. Some lenders may offer a lower interest rate, but you’ll pay for it with higher fees and closing costs. Others may offer a quicker timeline, but be lacking in communication, with no way to access your loan information online.
Compare your lenders, consider each factor and make your choice.
Choosing your Lender
Once you’ve chosen a lender, don’t waste time. Contact them as soon as possible to begin the mortgage loan process. You’ll likely need to provide some financial and identifying documents, like recent tax returns and a form of photo ID, before you can get started. Once you’ve done so, the lender can work on getting you a preapproval for your loan so you can begin home-hunting.
Choosing a mortgage lender is a critical decision that will have a major impact on your finances for years to come. At FCCB, our experienced Mortgage Lending team is well-known for their prompt communication, industry connections and knowledge, quick turnaround times, and getting the tough deals done. Read more about what past clients have shared!
Sources:
https://www.bankrate.com/mortgages/finding-the-best-mortgage-lender/
https://www.nerdwallet.com/best/mortgages/tips-for-finding-best-mortgage-lender
https://www.forbes.com/advisor/mortgages/how-to-choose-a-mortgage-lender/