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Top 5 Factors to Consider When Selecting a Mortgage Lender

According to recent surveys, 1/3 of Americans are looking to purchase a home within the next 5 years. Additionally, 3/4 of Americans admit that buying a home eventually is a priority. Real estate is a great investment, but the mortgage costs can be overwhelming.

Thankfully, there are a few options that can help with the mortgage.

More and more potential homeowners are selecting a mortgage lender to help with their real estate ventures. Keep reading to understand why a mortgage lender has your best interests in mind, and the top 5 factors to consider when picking one!

What Is a Mortgage Lender?

First things first, let’s clarify what a mortgage lender is. A mortgage lender is someone, either a bank or financial institution, that loans homeowners the funds to purchase real estate. Once real estate is purchased, the homeowners will then work to repay the loan with monthly payments until the loan is paid off.

The mortgage lender will determine the repayment schedule, monthly payment amounts, and interest rates.

1. Mortgage Lender vs Mortgage Broker

When selecting a mortgage lender, it is important to understand there are various options for lenders.

A mortgage lender is responsible for setting up the parameters of a loan and providing the actual money. This differs from a mortgage broker, who is not responsible for defining the terms of the loan or fronting the money.

Rather, a mortgage broker acts as a middle man between homeowner and lender. They will work with multiple lenders and attempt to match a homeowner to the lender that will provide the best parameters and loan rates. Brokers often charge fees for their services, as well as a percentage of the loan amount.

Other types of lenders, such as direct, retail, warehouse, to name a few, differ in regards to who is providing the money, and how directly the mortgage is provided to the homeowner.

2. Shop Around When Selecting a Mortgage Lender

Each mortgage lender will vary when it comes to mortgage loan terms and costs. Some lenders, such as Landmark Mortgage Planners, clarify their loan requirements before the consultation. These requirements are often dependent on a homeowner’s credit score, monthly expenses, and credit history.

Mortgage lenders will adjust their repayment timeline, monthly payment minimums, and their interest rates depending on a homeowner’s financial state.

It is helpful to consider comparing loan costs and loan requirements before committing to a lender.

3. Qualifying for Preapproval

When applying for mortgages, see if you qualify for a loan preapproval. Preapproval is a letter from a lender that verifies credit history, employment, and assets or income. Essentially, it indicates what a homeowner can afford, and demonstrates financial stability and dependability to a seller.

Preapproval helps secure lower interest rates, increases negotiation room with a seller, and speeds up the purchase process.

4. In-Person or Virtual Application

Another factor to consider when selecting a mortgage lender is the application process. Some lenders operate entirely online with document uploads and no communication between lenders and homeowners. Others will require an in-person meeting as well as physical documentation.

Determine how much face-to-face interaction you crave, and whether you want to sit down and talk to your lender about the loan process.

5. Lender Esteem

One last qualification to consider is esteem.

Some lenders will have much more experience in real estate than others, and thus more practice in securing better loan terms. A mortgage is a large investment, and it is important that you select a lender that you can trust and is working in your best interest.

Thinking Through Investments

Real estate is a big investment, and it is important to think through the decision. Consider these factors to ensure the greatest chance of success when selecting a mortgage lender.

For additional real estate information and advice, check out the rest of our website!


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About the Author

Kaya Wittenburg

Blog Author and CEO

Kaya Wittenburg is the Founder and CEO of Sky Five Properties. Since the age of 10, real estate has been deeply ingrained into his thoughts. With world-class negotiation and deal-making skills, he brings a highly impactful presence into every transaction that he touches.

He is here to help you use real estate as a vehicle to develop your own personal empire and feel deeply satisfied along the way. If you have an interest in buying, selling or renting property in South Florida, contact Kaya today.

Feel free to call me at: (305) 357-0635
or contact via email: