Choosing a Lender for Home Mortgage
For 1st Time home buyers and also for Previous Home Owners, picking a good, honest and qualified Lender can be frustrating and or exasperating experience. Being uncertain if you are getting the lowest rate, lowest closing cost, hidden fees are the biggest concerns our clients express to us. Real Estate agents can help in recommending lenders that provided their clients with good experiences and will be happy to share them with you. I suggest you compare at least 3 lenders.
- Pick a large Bank, maybe your current bank
- Saving and Loan
- Local Loan Broker, ask your Friends, Family, Real Estate Agent who they recommend
- I do not recommend the online lenders. From experience, I have seen too many instances of poor performance and when you are buying a home and planning Movers, Utilities, Schools and such, this is not the time for added stress from problems with your home loan .I like to say “If you can’t go to their offices and yell at them, then they don’t have the same urgency to protect their reputation as much as a local business”
Each should take about 5-15 minutes and compare to see which one you like the most.
- How Available they are.I personally like lenders who have an office in your area and not just some online company.There are large Online lenders that advertise low rates and great service, but they don’t live up to their promises.If your lender fails to get your loan processed on time or does not get you to the closing table, it can cost you quite a bit in time and money. You may have;
- Moving company rescheduling fees
- Required to move to temporary housing, storage and living costs
- Inspection Fees ( $600-$800 ) Option Fees ( $200 ) Appraisal Fees ( $450 ) Possibly loose Earnest Money, and other cost if the loan fall through.
- What are their rates and lender fees? A lender cannot lock you in till you have an Executed Contract. Compare on what they will give you today.
- Be aware that some may have a bit higher interest if they do not charge a 1% loan origination fee. They will finance this fee into the loan with a higher interest rate ( approx. 1/8 to 3/16 % ) Just be sure to take this into consideration. If rolling this fee into the loan, have all the lenders do it so you can compare apples to apples.
- Check their Loan Origination fees, Credit Check fees, Underwriting, Processing fees and any other misc. fees they may have.
- They may also “Estimate” Title fees. When comparing lenders, exclude the title fees so you can just compare Lender to Lender.
- All lenders will ask for the same information.There are some lenders that are getting back to the “No Doc” loans, these are usually with higher interest rates, credit scores, Lower Debt to income ratios and such.
Lately we have seen the better rates, lender services, dependability (closing on time ) from the independent Loan Brokers. The larger Banks and Online Lenders have not been as competitive or provided as good customer service as local lenders have done.
If you talk to a lender who gave you a quote that was higher but came back and say they will match what someone else is providing, ask them why they didn’t do this upfront.
A final Note,
After Closing, there are no Value Added Services from your lender. All their services are provided Before Closing. So choose a lender on how dependable they are to close on time, how responsive they are to your questions and their rates.