All home mortgage lenders aren't created equal. That means you have to shop around and do careful research before delving into the housing market. If this is your first time buying a home, this task can seem daunting. After all, there are countless mortgage lenders out there vying for your business. How do you know which one is best for you? Here are some tips for finding the right mortgage lender for your family.
Start Big and End Small
Investigate the options of online lenders, your existing bank or financial institution, and mortgage brokers. Create a list outlining the rates offered by each, then narrow down your selection from there. Consider not just interest rates but points and other fees as well. Don't just assume you have to get your mortgage through your bank or credit union. They may not end up offering the lowest rate for you, so it's important to shop around.
Head to Your Existing Bank
That said, it's worth a try to start with your bank or credit union to see what kind of a deal you can get. Find out which types of mortgages they offer and if there are any deals they offer current customers like yourself. You may luck out and get the terms you were hoping for.
Consider a Broker
If you're leery of navigating the sea of mortgage lenders, one option available to you is to hire a mortgage broker who can act as a middleman between you and lenders. They can't exactly cut deals or obtain low rates unavailable elsewhere, but they can help you narrow down your selections and pinpoint the best deal possible, says Bankrate. Just be careful when hiring a mortgage broker to make sure they are reputable.
Just like you would ask your family and friends for recommendations on good carpenters, plumbers, and electricians, so too should you ask for opinions on mortgage lenders. You will get solid insight as to which lenders are easy to work with and offer convenient, affordable rates and services. Another source of good information is your real estate agent. He or she should be able to impart advice on mortgage lenders with whom they've worked in the past. Local real estate agents have their fingers on the pulse of the housing market and are a vital source of information in the industry. Yes, some agents have in-house affiliated lenders that they recommend exclusively, but a good agent won't limit themselves to those. Other people to ask include your lawyer, financial adviser, or your accountant.
Take Lots of Notes
When you meet with various lenders, be sure to take copious notes, asking for things like Good Faith Estimates (GFE) and Truth-In-Lending (TIL) statements, recommends Forbes. In addition, inquire about lock-in periods, points, and any qualification requirements. Be aware of the fit between you and a particular lender. According to Texas Iron and Metal (click here), you should feel like you are part of a partnership engaging in a collaborative process, not a person being sold a product. Fair lenders will not only qualify you for a loan, they will also give you advice on how to improve your credit standing and how your mortgage gels with your long-term financial plan.
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