Mortgage Lender Selection Know How

mortgage lender selection know how

Home buyers have many options when it comes to mortgage lender selection. Selecting a good mortgage lender is not just getting the lowest interest rate offer. There are other components to consider, including making sure the home buyer is comfortable with the lender they chose.

Most components of the mortgage loan are the same across all lenders, but there are some that may differ. These differences can affect home buyer charges and the services they receive. The key components of the loan to consider include interest rate, loan terms, fees and services.

Many real estate transactions have gone sour due to poor lender services. To avoid poor lender services, below are some tips to guide home buyers and borrowers during mortgage lender selection:

Shop around during mortgage lender selection

Ask your agent for lenders they have worked with in the past, who offer competitive rates, terms and great service.

Get Rates and Terms in Writing

It is easy for lenders to quote a good rate just to capture home buyer’s loan or business. If the quote is not in writing, it could change. This is particularly true of lenders found over the internet. If the lender cannot give the quote in writing, home buyer should look for another lender. 

Compare Loan Estimates

Each lender should give the borrower a loan estimate, as required by law. This loan estimate is a form that helps borrowers to compare different loans from different lenders. Home buyers should use this loan estimate to shop around and choose the loan that benefits them.

Read the Fine Prints

Mortgage loan documents can be confusing. During mortgage lender selection, read all documents closely. If you don’t read the documents closely and understand them, you may end up with big surprises later on. Verify the numbers, including interest rate, monthly payment, lender and loan processing fees, closing cost, and down payment amount. These numbers shouldn’t change much from loan approval to closing if borrower’s credit and financial status remain unchanged.

Share Mortgage Goals with Lender

It is necessary that home buyers share their mortgage goals with the lender during mortgage lender selection. In return, the lender should suggest to the home buyer the mortgage option that will accomplish their goals. So, if the lender does not offer counseling on mortgage options, their service may be substandard. 

First Time Home Buyers

First time home buyers or buyers with dent on their credit may need a specific loan type. Therefore, such buyers should find out if the lender has the experience similar with their situations.

Lender Access during mortgage lender selection process

When home buyers or borrowers contact lenders for mortgage lender selection, they should be able to predict the lender’s accessibility. They should ask the lender how their loan will be processed, and who will be available to answer questions. They should ask for direct phone number of the contact person. If the lender resists, it may have difficulty to reach them when the borrower needs them after signing for the loan. 

Verify Lender Accessibility

To verify lender accessibility, just get the lender’s call back number and make a call to see if you are able to reach the lender. If they don’t answer their phone, leave a message and see how long it takes for them to get back to you. If the lender is hard to reach now, they may be even harder to reach after they have your business. 

Ask About Lender's Support

If the lender does their own processing along with taking loan applications and prospecting for new business, they may be too busy to take care of your loan.

Confirm Loan Processing Time

Borrowers should have the lender confirm date or timeframe for the loan. If they are not able to promise a date, borrower may not be able to conform to the sale contract. As a result, the closing may be in jeopardy. 

First Time Impression

Home buyers should take note of their first time impression of dealing with the lender. Is the lender prompt in responding to contact? Is the lender friendly and courteous? Did the lender explain things and educate the borrower on different loan options? Did they promise time line or date for the loan? This aspect of mortgage lender selection is very important.

Read Lender Reviews

Lender reviews can be helpful as they provide insight into what it is like to work with the particular lender. 

Summary

Mortgage lender selection could be easy if you are prepared and know what you want from the lender. Following the above steps will greatly improve your knowledge and ability to select your lender for a lower mortgage. We will be glad to help you if you contact us. We have a network of mortgage lenders available to you. 

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Festus Okolie

Festus Okolie

I am a Texas licensed Real Estate Agent and Realtor you can trust. I provide hassle-free real estate services in Dallas-Fort Worth Metropolitan area in Texas. I help home buyers and sellers achieve their real estate goals. I take particular interest in negotiating deals to benefit my clients.

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