March 14th, 2018 5:42 AM by Jackie A. Graves, President
today’s competitive real estate market, homebuyers need all the help they can
get in finding the right home at the right price. And once you find your ideal
house, you want to quickly present a winning offer and close on it fast.
the right mortgage lender to help you finance the purchase of your home is a
really important step. After all, this is a long-term loan you’re going to be
paying for 10, 20 or 30 years. And yet, as a mortgage industry veteran, I often
see people forget to do their homework in the rush to make a competitive offer.
you want to find a mortgage lender that not only offers a very competitive rate
but is available and delivers excellent service. Here are five tips to help you
navigate the process and identify the lender that’s right for you.
Ask for referrals.
by asking someone you know who has recently gotten a mortgage to see if they
would recommend their lender. Ask a financial adviser, business colleague or
real estate agent you know to help you write a short list of referrals. An
agent should be able to provide you at least two options. Anything less, and
you might question whether there’s a financial interest in the relationship
between the agent and the mortgage company they suggest. Often national lenders
referred by agents end up offering higher interest rates when compared to local
today’s competitive market, many buyers skip this important step when they
start looking for a home. A pre-approval allows you to confirm how large of a
loan you can qualify for based on several factors. It also positions you to
make a serious offer when you find the home you want to buy. For a
pre-approval, the lender verifies the buyer’s application information through
income and asset documents provided by you or retrieved directly by the
mortgage company. Many lenders can also provide a “prequalification” online,
based on unverified information provided by the buyer. However, most sellers
don’t give much value to a letter that doesn’t state the information has been
validated. The most important thing is to take the time to provide what is
needed for a thorough pre-approval process.
Do your homework and check online reviews.
has revolutionized the mortgage selection process, making rate comparisons a
quick and easy first step. That said, it’s important to look beyond the initial
rates and dig deeper into loan terms (the fine print), such as closing costs,
hidden fees and down payment requirements. Some lenders will claim to charge
“no origination fee,” but their online quote includes a hefty 2% “discount
point” in the fine print. Another great resource when evaluating lenders is to
read online reviews on Google, Yelp, Zillow or Facebook.
Evaluate the rate, level of service and speed in processing your loan.
internet is filled with “discount” mortgage financing options with great rates,
but often they are not able to quickly close your mortgage or offer you the
level of service you need. On the other end of the spectrum you have the large,
national mortgage companies that purport to offer both great service and value
but in reality are not able to give you a competitive rate, and the service is
not on the level you might receive from a local company.
this in mind, it’s important to do research before choosing a mortgage lender.
You not only want to compare the rates but also the level of service each
lender provides. When comparing rates, be sure to get the estimates on the same
day as rates can change daily. When reviewing level of service, ask how quickly
they can process your loan. Is the lender available to personally help you
choose the right product and rate, or are you waiting on hold for “the next
available representative”? Do they make
you jump through hoops just to get a rate quote?
Work closely with your real estate agent, but take the lead on selecting your
real estate agent is a vital and important partner in finding and buying your
next home, but it’s important that you choose your lender rather than blindly
going with who your agent recommends. The reality is sometimes there is a
financial tie between your real estate company and the lender it refers. In
this case, as always, it’s important to closely compare rates with other
lenders. Family and friends who have recently purchased a home, as well as
trusted professionals who work with lenders can help steer you in the right
direction. If you find a lender that wasn’t referred by your agent, ask your
agent to do a quick phone interview with the lender to be sure you’re not
This All Matters
the end of the day, your mortgage loan is the single biggest financial decision
you’re likely to make in your life. It’s important to take time to get it
right, and that ultimately comes down to finding a lender who can do three
things: offer competitive rates, offer great service and quickly process your
loan. By keeping these areas in mind, you’re not only going to win as you go to
buy your house — you're going to also save money and time.
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