A Guide to Selecting a Mortgage Lender
Any person who is interested in purchasing a home needs to look for a mortgage lender. Mortgage payments are made for 20 to 30 years. Choosing a lender who is trustworthy is vital. There are a lot of mortgage lenders out there. It becomes overwhelming to select the best. Keep reading to know what you should have in mind when selecting a mortgage lender.
You can start by asking your friends for referrals. They will give you names of mortgage lenders who offered them reliable services. Avoid depending on referrals only. You need to do your own research. Google and check the portfolio of potential lenders. Remember that lenders are not equal. There are many choices such as credit unions, banks and correspondent lenders. It is wise if you can to avoid online lenders. Most offer terms and rates that are in reality not true. To know the ratings of the lender, check with the Better Business Bureau.
When choosing a mortgage lender, go for one who will help improve your credit score. A high credit score qualifies one for a loan with a lower interest rate. Keep in mind that it may take some time to improve your credit score. You want a lender who will do it right. A reliable lender will do a good job before they submit your mortgage application.
Before choosing a specific mortgage lender, make sure you compare rates. Avoid rushing for a lender who offers the lowest rate. It is important to note that a lender cannot give you guarantee for any rate. They have to check your application and do a credit review or check. Closing costs need to be considered too. It is important you know about all the costs involved in advance. You may come across a lender who offers a lower interest rate and find out that their origination fee is the highest. Compare the total costs from potential mortgage lenders for you to find one with the most favourable terms.
Get a pre-approval letter before picking a mortgage lender. It provides you with an advantage over any other potential buyers who are interested in the same house. The letter also assists you to know what challenges you may encounter when getting a mortgage. Choose a lender who is willing to explain to you such challenges and come up with a plan to overcome them.
Also, you need to ask the mortgage lender a lot of questions, create a list. Asking plenty of questions will help you identify a mortgage lender that is the right fit. Compare the answers the lender offers. Go for a lender who will give you useful information. Read the fine print thoroughly before signing on the dotted line. You will know of any hidden fees or terms.