Consider range of lenders when mortgage shopping

Ilyce Glink and Samuel Tamkin

Q: I want to take the plunge and buy my first home or even build a home. What is the most important thing I need to know when contacting a mortgage lender?

A: There seems to be a feeling that lenders are similar and that if you've gotten a quote from one, it's going to be the same everywhere.

And yet, competition abounds in the mortgage world; different types of lenders offer different programs with different costs. That's why we recommend that you should interview (or reach out) to at least three or four lenders, including a national online lender, a local lender, a credit union and a mortgage broker. They'll all offer different rates, fees, points, etc. Make sure you notice things such as customer service. Lenders that have cheap rates but lousy customer service make for a frustrating homebuying experience.

Your real-estate agent might also have a few good recommendations.

If you're buying a new-construction home in a large development, you might need to use the builder's lender because you won't want to (and might not be able to) lock in your rate for the six months to a year that it will take to build your home.

Builders usually pair up with a lender that offers a better (or sometimes merely decent) deal to lock in all the buyers in the development.

If the builder obtained construction financing from a lender, that same lender might provide financing to individual buyers. Frequently, the terms offered by that lender are more advantageous than those offered by other lenders.

The reason for the discount is that the construction lender might want to work with the builder to facilitate financing and make it easier for buyers to close on their homes.

Regardless, it’s wise to do your homework.