Finding the right mortgage lender may be as hard as finding the right house to buy. Prepare yourself beforehand, and learn about all the options available before you make any decisions.
Your choice of mortgage lender is very important. Some of the more important factors to consider are the mortgage interest rate, lender’s fees, and closing costs.
Know the difference between a Mortgage Lender and a Mortgage Broker. A Mortgage Lender is lending you their own money, while mortgage brokers act as intermediaries who represent many different lenders.
Try to avoid out of state lenders. Local lenders offer more accessibility. Out of state lenders may not be familiar with your state, resulting into incorrect estimates. The out of state lender may not be associated with high quality appraisers and title companies, which are detrimental to home loans.
Check with BBB for a clean record of the lenders.
Get a Good Faith Estimate. Realize that lenders are not bound to good faith estimates. The good faith estimate should show the appraisal fees, points, title insurance, and is only an estimate on how much it will cost to close your loan.
Figure out the type of mortgage you need. Some lenders only handle certain types of loans. Knowing the type of loan you need for will narrow down your search for the best mortgage lender.
Basically there are three types of loans: a fixed-rate mortgage where the interest rate never changes. An (ARM) adjustable-rate mortgage, and a balloon mortgage.
Familiarize yourself with the current and ever changing mortgage rates.
It is always a good idea to have a loan pre-approved before going out shopping for a house, in that way you are free and clear in conscious and not have to worry about if you will be approved the loan before choosing which home to buy.
Understand the fees Besides the interest rates, you will want to compare the closing fees, points (each point is one percent of the amount you borrow), and miscellaneous charges and commissions between lenders.
Credit Your credit is very important to the lender approving your mortgage. Without a good credit score, you may not qualify for the best interest rate. It is important to know your score before you apply and try to repair any discrepancies.
Employment Showing you have a strong employment history by working for an employer for more than two years is very important to help prove you can pay back the loan.
Down Payment By having a substantial down payment, it will make you a lesser risk to the lender. It will also give your home instant equity and show financial responsibility.
Find out more information on mortgages at Reverse Home Mortgage Search.