Besides deciding on a home along with choosing the RIGHT AGENT, choosing a mortgage lender is the most important part of your home-buying journey. This is because your home will be your biggest asset and purchase and the lender you choose can determine everything from the various fees and the interest rates you will be needing to pay, most importantly PRICING.
The lender is a HUGE part of the process, and when the lender doesn’t do his/her job, the whole transaction can fall apart. If you need any help with finding a good lender, ask your realtor as they can recommend the best ones out there based on their experience.
Comparing Fees
Make sure that you know any fees you may be responsible for paying. These fees may be charged for a loan application, appraisal, credit report, document prep, inspection, notary services, processing, etc. Know how much you can afford to pay down. The best lender will be able to offer terms that fit your financial situation.
What are the types of Mortgage Lenders?
Banks – Using a bank can be one of the strongest options for borrowers who want all their finances in one place. Although the process may take longer.
Credit Unions – Normally, you can get a lower loan rate and lower fees at a credit union than at a bank. But they tend to have limited loan products. Also, borrowers must be a member of the credit union in order to get their loan through that entity.
Mortgage Lenders – You can expect more loan options with mortgage lenders, and they tend to be faster than banks. These lenders have more flexible with borrowers with impaired credit.
According to Melissa Cohn, regional vice president at William Raveis Mortgage in New York, banks and credit unions generally have the best rates but are more conservative with their lending guidelines. On the other hand, non-bank mortgage lenders and private lenders usually have higher rates but are more aggressive with their lending. “The goal is to find the lender that will offer the lowest rate for the longest amount of time at your desired loan to value,” -Melissa Cohn, regional vice president at William Raveis Mortgage in New York.
When shopping for the best mortgage lender, the primary determination should be based on your needs and specific financial situation. When looking for a mortgage, a buyer should first determine how long they intend to be in their new home, where they see their income going over the next period of time, and what their credit score is as per Cohn.
Bottomline
Keep in mind that the first thing a realtor would ask you when purchasing a home is are you pre-approved? This is the very first step to take if you are serious about purchasing a home and if it is your first time it may be tricky. If this first step falls apart, everything can go down with it so make yourself knowledgeable, ask questions and consult with a realtor for your best options. When things are not going your way, your realtor may be the only person that will be able to help you and with that, you also have to choose the best realtor in the area.
Reference: https://www.thebalance.com/