How to find a mortgage lender
The process of buying a home begins with finding the right mortgage lender. A good one can save you thousands in interest charges and other expenses over the life of your loan.
To find the right lender, organize your finances first and then learn about the different mortgage products that are available. Then compare rates and fees to make the best decision.
Qualifications
Mortgage brokers, direct lenders, traditional banks and credit unions and online mortgage loan alternatives are all available to consumers. Your choice of mortgage lender determines the types of loans you can get, as well as the rates and fees charged. It also determines how quickly your new home purchase can be closed.
When you meet with potential mortgage lenders, explain your budget and the type of loan that you want to obtain before asking about their mortgage qualification requirements. These may include:
Conventional mortgage lenders typically require a minimum credit score of 620, along with income, a debt-to-income-ratio, assets documentation, down payment, loan type, prequalification, preapproval, or prequalification. Ask if you can buy mortgage points to lower the interest rate. Also, ask if an escrow is required for payments of property taxes and insurance premiums.
Fees
It is important to compare the rates, fees, and terms of different lenders when shopping for a home loan. Lenders include mortgage bankers/brokers/conventional banks/credit unions/private lenders/state/federal programs/online only lenders – each offers different loan products/terms/fees options/terms.
Some lender fees like origination or discounts points (prepaid interest) cannot be avoided or reduced; others can be negotiated depending on your lender. All lenders should give you a Loan Estimate that outlines all costs. Compare this document carefully to ensure it is an honest assessment.
Consider negotiating any fees with each lender. Especially those that are confusing or difficult to understand. For example, one lender may advertise no origination fee, while another charges it under a different name like "processing fee". Don't forget to negotiate fees that you may be able avoid, such as the borrower contribution towards closing costs and appraisal.
Types of loans
Mortgage lenders offer a wide range of options, from local banks to credit unions and national lenders who specialize in home loans. Your lender may offer different programs depending on the type of loan that is right for you. Conventional loans that meet Freddie Mac or Fannie Mae standards are typically purchased and serviced primarily by large mortgage servicing firms to minimize their risk.
If you have good credit and a down payment, federal and state programs with lower downpayments and fewer underwriting criteria may be worth looking into. These programs are especially helpful for first time buyers and borrowers with bad finances.
Compare offers from different mortgage lenders once you have narrowed your options down. Compare down payments, rates of interest and fees to make your comparison as objective as you can. Keep in mind local taxes and homeowners' insurance costs that may be involved.
Reputation
Mortgage lenders are financial service companies that provide money to homebuyers as a form of payment. Mortgage lenders offer a variety of loan programs and interest rates. Some even specialize in niche markets such as VA loans or nonqualifying mortgages.
Compare rates and fees from several lenders before choosing one. Your bank, local credit cooperatives, and mortgage brokers are all good places to start.
Preapproval is recommended before house hunting, as many sellers will not consider buyers who don't have a letter of preapproval. Mortgage lenders will look at your recent debt applications (hard inquiries in your credit report), as well as your payment record – especially because late payments can seriously harm your score. Lenders want to see evidence of on-time payment in order to show responsible borrowers that can comfortably manage monthly mortgage repayments and a manageable ratio of debt-to-income.
Steve Wilcox W/Primary Residential Mortgage, Inc.
Steve Wilcox W/Primary Residential Mortgage, Inc.
mortgage company salt lake city
The process of buying a home begins with finding the right mortgage lender. A good one can save you thousands in interest charges and other expenses over the life of your loan. To find the right lender, organize your finances first and then learn about the different mortgage products that are available. Then compare rates…