How To Find The Best Mortgage Lenders
Whether you’re moving to a new home or buying a home for the first time, you need to make sure you’re working with a mortgage lender or a mortgage broker who will find the best mortgage rates, take steps to make sure you will close on time and provide you with guidance and support during the process.
The best mortgage lenders for first-time buyers take the time to disclose mortgage fees, help you find the best deals and explain how the loan process works.
Know the difference: mortgage lenders vs. mortgage brokers
A mortgage lender represents the actual financial institution that loans you the money to buy your home. A lender might work out of a bank or purchase applications from a broker.
A mortgage broker connect borrowers to lenders were they have the ability to offer competitive rates and loan products. A direct lender offers mortgages, including commercial banks that offer a slew of services and mortgage banks. If you decide to obtain a mortgage through a direct lender instead of a mortgage broker, you will need to apply individually to each lender. This can be a time-consuming and frustrating process. The primary benefit of a mortgage broker is that they can shop with many lenders and get a variety of quotes, rates and loan programs.
A mortgage broker is able to shop a multitude of products and rates, as well as specialty programs such as Bank Statement Program, Unique Investment Programs, Hard Money Loans, Housing Events (Foreclosure, Short sale, Deed in lieu or Bankruptcy). If you don’t want to go through the hassle of contacting various banks, a mortgage broker might be a better option for you.
When shopping around for the best mortgage, it’s a good idea to meet with more than one lender
Finding one you can establish a personal connection with can make it easier for you to communicate with them. You should speak to at least two, but no more than three lenders. This way, you will have a chance to build rapport and find out with whom you likely will have the best relationship.
Ask mortgage lenders key questions
Because a home loan can be complicated, you need someone who is going to walk you through the process.
For first-time homebuyers, it’s extremely important to work with a loan officer that is responsive, patient and knowledgeable. The home-buying process has a lot of moving parts and can be intimidating, making it imperative that (first-time homebuyers) work with someone who can help them navigate the process.
Ask these key questions during a mortgage lender interview:
■ How long have you been in this business?
■ How often do you work with first-time homebuyers?
■ What can I expect from you through this process?
■ What feeds do I have to pay?
■ What are the qualifying guidelines for this loan?
■ What is the minimum downpayment required for this loan?
Beware mortgage lender red flags
Be ready to spot these four red flags that signal a lender might not be a good match:
■ A one-size-fits-all approach: Prospective homebuyers should first do their research and ensure the lender will provide a high level of service while working to find the best possible configuration of rates and fees to meet their individual needs.
■ Aggressive sales tactics: The best lender will go out of his way to serve as an advisor and won’t be too pushy. If you feel like you have no bargaining power and the lender is just selling to you, it might be best to walk away.
■ Unwillingness to put anything in writing: Your loan will eventually serve as a sales contract, so you need to make sure any agreements are in writing.
■ Poor communication: A lack of responsiveness from a lender is not a good sign. You should get timely responses to all of your inquiries.
Make an informed choice when choosing a lender
When you decide to buy a house, it pays to do your homework before you choose a mortgage lender. Take the time to shop around and find a lender you feel is trustworthy and reliable. You need to work with a lender who will take the time to learn about your situation, explore several options and personalize the experience to accommodate your budget and preferences.