Buying

Mortgage Tips: How To Choose the Right Lender

07.30.2020

Are you preparing to search for your perfect home? If you’re like most buyers, obtaining mortgage financing will be part of the process. It goes without saying that you’ll want the best possible interest rate, terms, and conditions—and that means finding a lender that’s equipped to serve you well. 

If you’re not sure where to start, you’re not alone. There are so many lenders to choose from that many buyers find the process overwhelming. Fortunately, there are things you can do to help ensure that your search is smooth.

Here are a few simple mortgage tips you can use to find a lender capable of meeting your needs…

Know where you stand

Before you begin your search for a lender, you’ll want to make absolutely certain that now is the right time to buy. If you don’t know your credit score, obtaining it should be a priority. It may be lower than you expect, in which case checking to ensure that there haven’t been any reporting errors is crucial. If your score is accurate but not optimal, there are steps you can take to improve it before moving forward in the application process. Try to diversify your credit mix if need be, and lower your utilization rate if it’s high.

Understand the landscape

Once you’re well-positioned to apply for a home loan, it’s time to take the first concrete step toward finding a lender. To ensure the decision you make is an informed one, you’ll want to get familiar with the mortgage lending landscape. It’s made up of banks, brokers, credit unions, and private lenders, to name a few. You may think that going to your bank is the most straightforward solution, but it may not be the most beneficial option. That’s why it pays to do your research—and consider the pros and cons of each type of lender available to you. 

Weigh your options

To make the right decision, you’ll have to ask the right questions. From whether prepayment penalties will apply to what you can expect in terms of loan process times, being informed about what each lender brings (or doesn’t bring) to the table is key. If you’re looking to compare rates and terms efficiently, you may want to consider working with a broker. These are professionals who specialize in mortgages. Unlike your bank, they can also comparison shop mortgage products—which leaves more time for you to focus on home hunting

Apply for pre-approval

While many home buyers forgo mortgage pre-approval, obtaining it offers some significant advantages. One of the biggest is the positive impression it makes on sellers. When a lender vets your financial situation and tells you the amount you’re likely to qualify for, it sends the message that you’re a serious and financially-stable buyer. What many purchasers don’t know is, pre-approval can also help you determine the ideal place to get your loan. By applying with various lenders, you’ll get a stronger sense of the rate and terms you can expect to qualify for with each one. 

Obtaining a mortgage doesn’t have to be complicated, but it does take a bit of planning—especially if you’re hoping to secure the best conditions. With some advice from a trusted financial expert and the guidance of a talented local agent, you can ensure that your purchase is smooth—from financing to closing, and beyond.

If you’re ready to start the search for your dream property? Get in touch to learn how I can help you today!

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