Buying a home is one of the biggest financial decisions you’ll ever make, so you don’t want to jump the gun when choosing a mortgage lender.
The first thing you need to know is that there are hundreds upon hundreds of mortgage lenders. When you throw in just as many brokers – if not more – you have all the options you could ever need.
However, finding the right mortgage lender is easier said than done. If you assume that they’re all the same, you could end up making a poor decision that costs you time and money, while also adding stress to your life.
Here are five tips you can follow on your search for the best mortgage lender:
1. Talk to Your Local Bank
Chances are that you already do business with a local bank. If you’ve come to trust them over the years, start your search here.
By sitting down with a loan officer, you’ll quickly learn more about the types of mortgages that are available and how to apply.
Note: you may qualify for the best rate through a bank you’ve already established a relationship with.
2. Review Your Credit Report and Score
Simply put, the higher your credit score the better chance you have of securing a mortgage. On top of this, a higher score results in a lower interest rate, thus saving you thousands of dollars over the course of your loan.
In advance of speaking with mortgage lenders, request a copy of your credit report and score. If there’s something you can fix – such as an error on your credit report – take care of it before you proceed with buying a home.
3. Know How Much You Need
It’s critical to know how much money you need to borrow, as this will guide the mortgage application process.
Along with this, you’ll want to get preapproved by at least one lender, as this gives you a better idea of how much you can afford to spend.
The last thing you want to do is waste time shopping for homes you can’t afford.
4. Compare Rates and Fees
This is one of the most important steps you’ll take, as rates and fees vary from lender to lender. Even a small difference in rate can result in big time savings.
Many lenders attempt to sneak fees into their contracts, so do whatever it takes to protect against this.
5. Ask Questions
You’re in charge of your situation, not the lenders you’re speaking with. Ask questions, get answers, and move on if you don’t like the way you’re treated.
To ensure a fair comparison, ask the same questions to every lender you speak with.
Final tip: request more information – such as a preapproval – from three to five lenders, as this is the only way to truly learn more about what they have to offer.
Buying a home is supposed to be one of the most joyous occasions of your life. Don’t throw all the fun out the window by choosing the wrong mortgage lender or securing a loan that doesn’t suit your finances.
Do you have any experience buying a home with a mortgage? What steps did you take to compare lenders? How long did it take you to find the right one?