How to Choose a Home Mortgage Lender
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Before you even begin looking for a home, careful research to find a knowledgeable and reliable mortgage lender will help set you up for the best home buying experience possible. After all, buying a home is an exciting time!
Let’s get started! As you start down the path towards purchasing a new home, find a mortgage lender that’s the right fit for you. A good lender will help you navigate the home financing process with ease, providing you with guidance every step of the way. Here are some tips we’ve prepared to help you choose a mortgage lender:
Tip #1: Know what you can afford. Knowing your budget and how much home you can afford is essential when you begin the search for your perfect home. Experienced mortgage lenders will help you determine this by asking a number of questions to assess your situation. Are you a first-time homebuyer? Do you need a loan with a low down payment? Are you ready to refinance a home or finance the purchase of a second home? If you’re not sure what type of mortgage you need or how much you can afford to pay for a home, that’s okay—the right lender will take the time to answer all your questions and help you determine which loan is the best fit for you.
For added reassurance, there are many free online financial tools and resources to help you. Check out our “How Much House Can I Afford?” calculator and obtain your free annual credit report at www.annualcreditreport.com from each of the three major credit bureaus: Experian, Equifax, and TransUnion.
Tip #2: Ask around for recommendations. Talking to others about their experiences will help you find a reputable mortgage lender. Referrals from those close to you can make the process of choosing a mortgage lender less daunting and help you find someone you can trust. Ask your friends, family members or coworkers who have purchased a home within the last few years about their experience with their lender.
Call your local bank and ask for the names of the lender(s) that cover the market area you’re hoping to buy in. These lenders understand the local real estate market and can share their insights to help you make informed decisions. Talk with your realtor, financial advisor or attorney to help you make a list of lender referrals. These professionals deal with lenders regularly and can help point you to a mortgage lender with expertise, adding confidence to your decision. You can back up any recommendations you receive with additional information by looking up the individual mortgage lender’s NMLS ID number on the Nationwide Mortgage Licensing System at www.nmlsconsumeraccess.org.
Tip #3: Make a list of questions to ask. You can ask a lender questions without even applying for a loan, so ask as many questions as you need to. Keep questions consistent between lenders so you have a standard for comparison. You may want to ask:
- What types of loans are available to fit my situation?
- What financial documents will be required when I’m ready to apply?
- What types of fees should I plan for when I finance a home?
- Once I apply for a mortgage, how long until my loan will close?
A good lender should ask you a lot of questions to fully understand your needs before they start answering your questions. They should then take the time to answer all of your questions to help you feel comfortable about the process. A good way to get to know how a lender will work with you is to apply for a mortgage pre-qualification. This step will help you better determine the mortgage amount you may qualify for as well as validate to realtors and sellers that you are a qualified buyer.
Tip #4: Narrow your possible choices of mortgage lenders. Meet with the top mortgage lenders on your list and think about how helpful and responsive each lender seemed. Look for lenders who were helpful, knowledgeable, respectful, and willing to answer any questions you had. Did they take time to explain your options? Did they explain the timeline for progressing with your loan application? Your lender should also be accessible, responsive and update you throughout the process. If the lender you’re working with doesn’t respond to your questions or is difficult to reach, you may want to seek another lender.
Choosing a mortgage lender relationship should be just as important as finding the perfect home since you will likely hold a mortgage for years to come. Whether you already have a home in mind or you’re just starting your search, Kennebunk Savings can help you navigate the many financial decisions ahead. Contact one of our friendly, knowledgeable mortgage lenders today!