How to Choose the Best Mortgage Lender
Research is key
Buying a home can be a drawn-out process that might test your patience, or it can go smooth with little to no hassle. Everyone’s experience is unique — it all depends on your circumstances. The process involves many steps, from looking over real estate ads and contacting potential realtors, to taking a hard look at your savings and crunching numbers for your down payment. One of the most important steps, however, is picking the best lender for your mortgage. Why? Because you’re going to have a relationship with this organization for years. At the very least, you should properly vet them before signing on.
Available Lenders
The type of lender you ultimately end up choosing will determine the quality of service you’ll receive, along with the rates you’ll be offered. Also, keep in mind that lenders will assess your credit risk in different ways, so it’s important to determine which one is a good fit for your particular needs.
Some of these lenders include:
National and regional banks
Mortgage bankers
Portfolio lenders
Direct lenders
Mortgage brokers
Wholesale lenders
Credit unions
For more details, refer to my post regarding types of mortgage lenders.
Mortgage Types
There are several types of mortgages. Conforming and non-conforming mortgages revolve around compliance with government-sponsored entities. Qualified and non-qualified mortgages take into account risk. Then there are government-backed mortgages, insured by federal agencies. Conventional mortgages are not insured by any government entity, but by a private lender. They’re usually offered to consumers with good credit who can provide a higher down payment.
To get a better understanding of what's the best mortgage for you, it’s important to research
reputable online sources and reach out to experts who could lend a helping hand. The more information you’re exposed to, the better.
Customer Experience
When it comes to mortgages, first-time homebuyers will surely need help throughout the process. A lender who is willing to provide assistance will stand above the rest because a little peace of mind goes a long way. This help can be in the form of online calculators to determine monthly payments, substantial online information, phone consultations, and any gesture that will take some of the burden off the buyer.
Lender Reputation and Transparency
A lender with a transparent record and a good reputation can solidify consumers’ trust in them. Some nationwide organizations exist with the sole purpose of filing complaints from consumers and to make sure regulatory actions are a matter of public record. With these resources at your disposal, you can look up any company or bank and check up on their industry standing.
hat said, big lenders usually have plenty of complaints filed against them because of the large number of clients they serve. While this is entirely normal, take a closer look and draw your own conclusions.
Bottom Line
When it comes to buying a home, making the right decisions from day one can put affordable monthly payments within your reach. Anyone can take the first step toward buying a new home today. Searching for the best mortgage rate can be an arduous process but in the end, when you’re finally sitting in your new home, you’ll know it was worth the effort.
