Consider these factors when choosing a mortgage lender
A home is the most significant purchase many people will ever make.
Perhaps because of this, many buyers — particularly those who are purchasing real estate for the first time — are understandably nervous about the homebuying process.
The decision regarding which home to buy warrants ample consideration, but so, too, does the buyer’s choice of lender.
Advertisements for mortgage lenders can be found all over the internet, on radio and television, and print media. The sheer volume of lender options can make it hard for homebuyers to find the right fit for their situation.
Couple this conundrum with lending-related terminology that many first-time buyers may be unfamiliar with, and it’s easy to see why prospective homeowners can feel overwhelmed about the process of borrowing money to buy residential real estate.
When looking for a mortgage lender, prospective homeowners should never forget that the choice of lender is — at least in most cases — entirely theirs to make.
When choosing a mortgage lender, a host of variables should be considered. The following are three key factors that, upon ample consideration, may help buyers rest easy knowing they did their due diligence when looking for lenders.
• Reputation/recommendation
Just like other businesses, lenders have reputations, and often those reputations can be discovered via some simple research.
Peruse online reviews to determine what past buyers felt about a given lender.
If possible, also ask friends, family or colleagues who they have worked with in the past to secure a mortgage and if they would recommend their lender. These personal recommendations may carry more weight than any reviews on the internet.
• Fees
Fees vary from lender to lender.
The term fees should not be mistaken for interest rates, which change daily and are typically dictated by the financial industry and prospective buyer’s credit history and financial standing.
When speaking with potential lenders, ask for a written rundown of applicable fees and find out what services those fees include. Also, be sure to get closing-cost estimates in writing.
Compare and contrast the fees and closing costs of various lenders before making a final decision. Some lenders may charge considerably more in fees than others, so buyers should put in the effort necessary to comparison shop.
• Personal interaction
Buyers, especially those who have never before purchased a home, will likely have lots of questions. This is where personal interaction with a prospective lender should be noted.
Securing financing for a home purchase can sometimes seem like an impersonal process, but it doesn’t have to be, and many lenders are happy to answer buyers’ questions. Lenders who answer questions quickly and clearly can make buyers more comfortable about the home buying process.
Buyers may want to avoid lenders who seem evasive or unwilling to answer questions in writing.