What Makes A Good Mortgage Lender? Tips for Home Buyers
Finding the best mortgage loan isn’t just about securing the lowest interest rate; it’s also important to find a lender that represents your interests. There are many qualities a good mortgage lender should possess that indicates they are here to help you through this process. First, you need to know where to get a mortgage before weeding out the competition.
Where Can I Find a Mortgage?
Many places can help you get a loan, including your own bank. Conventional banks let you apply online or in-person through a loan officer. You don’t have to limit your search on the institution you currently bank at because several other local branches can give you a mortgage, sometimes with a better rate.
Credit unions, nonbank mortgage lenders, mortgage brokers, and mortgage marketplaces offer several ways to find the best loan option. A broker is especially beneficial because they review offers from a lender network that could give you the best interest rates. It’s essential to learn how to get the best mortgage rates to ensure you pay your home off faster.
Prepare Before Applying for Loans
Even if your mortgage lender is a great person and has your best interest in mind, they can’t help you if you aren’t financially ready or aren’t pre-approved. Before meeting with any mortgage lenders, do the following:
- Check Credit Score: Your credit score should be in the 670-739 range to ensure your mortgage approval. Check your credit score several months before applying. If your credit score is too low, ensure you make payments on time, pay off debt, and stop creating more debt through loans or credit.
- Save On A Downpayment: A downpayment of 20% is ideal, but you can put 5% down for most loans. Still, the more money saved, the better.
- Gather Documents: You must have proof of residency, identity, employment, and information about your debts, financial obligations, and assets.
- Establish Financial Security: Make sure you have a stable job and enough income to afford the recommended monthly payments for the mortgage.
Once you’re ready, ask to meet with a mortgage lender.
Always ask a series of questions to understand your mortgage lender better. Doing so will also give you a read on their personality and whether or not they can help you.
The following questions can give you a lot of information about the mortgage process.
- How much should I borrow to buy a home?
- How much do I need for a downpayment?
- What is the interest rate?
- Should I go for a fixed-rate or adjustable-rate?
- How much is your fee?
- Can I lock my interest rate?
- What are the closing costs?
- Are there any hidden costs?
- When is the closing date?
- Can I delay closing?
By now, your mortgage lender should demonstrate the traits expanded upon in the next session. If they aren’t overly personable, they should at least have the knowledge and experience to push you in the right direction.
What Traits Make a Great Mortgage Lender?
Knowledge and Experience
It’s positive that your mortgage lender is a local community member because they understand the real estate in the surrounding area. They may also have connections with people that can minimize the cost of homeownership, like appraisers or insurance brokers.
A Good Track Record
Look up reviews on the mortgage lender you’re about to meet and determine if they hold good standing in your community. Ask neighbors and real estate professionals what they recommend and whether others have had a good or bad experience with the lender.
Flexible and Adaptable
It’s challenging to get a mortgage if you can’t meet with your lender. During your first session, ask when you can meet with them again to finalize the paperwork. While it’s normal for lenders to stay busy, it’s also crucial that they can meet with you around your schedule.
Honest with Information
While asking questions, did you feel like the lender was withholding information? Were they uncomfortable answering your questions? If that’s the case, they may not be offering you the best deal. Make sure that you have a lender that won’t surprise you with rates and feed.
Your lender needs to have strong moral principles and not hide great mortgage rates from you. Throughout your search for the perfect lender, do your own research by using databases and asking brokers about the best rates available.
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