One of the biggest decisions you’ll make as a homebuyer is also one of the most complex: choosing a lender. Home mortgage lenders are often local and regional banks, credit unions, or online mortgage brokers who can help you identify financing options based on your creditworthiness, risk profile, and financial circumstances. To begin your home loan search, find out if you qualify for an affordable housing loan or other program that might reduce your down payment or interest rate. If not, start researching private lenders from personal contacts and real estate agents to local directories such as the Yellow Pages or websites like www.HRAClenders.com. The right lender may be closer than you think! Here are a few tips to help you choose the right home mortgage lender:
Check out the home loan lender’s reputation online.
You can quickly discover how a lender has handled past clients by searching the name of the lender or their website on Google or other reputable website reviews. You can also review the Better Business Bureau website to see if the lender has any outstanding concerns or complaints. By checking the reputation of the home loan lender, you can get a good idea of how they operate and identify any problems that may be associated with that lender.
Look for transparency in the lender’s practices. Make sure the lender has worked on mountain properties
Some lenders specialize in funding home loans for particular regions and types of properties. To make sure the lender has experience working in your area, ask the lender if they have funded any mountain properties. If the lender has worked on mountain properties, that’s a good sign that they understand the challenges of obtaining a home loan for a property with a lower value.
Determine how much you can borrow before choosing a lender.
Before choosing a lender, make sure you have a good idea of how much you can borrow. Your down payment amount, debt-to-income ratio, credit score, and the amount of equity you have in your property will all affect how much you can borrow. Each home loan lender will have their own standards and requirements, so be sure to discuss your financial situation with at least 2 or 3 lenders before choosing the right home loan lender.
Take advantage of free shopping tools when choosing a lender.
Many home loan lenders will provide you with a free home loan estimate and pre-qualify you for a loan. Although these tools should not be considered an actual loan commitment, they can be helpful in the home loan process. A pre-qualification letter is basically a lender’s opinion of how much you can borrow based on your financial situation. A home loan estimate is a more detailed calculation of how much you can borrow based on your financial situation. A home loan estimate also provides an estimated interest rate.
Be wary of any lender that pressures you to sign immediately.
At times, home loan lenders may offer you a “discounted” interest rate as an incentive to move forward with a particular loan. Although these discounted rates may seem like a good deal, you should always confirm the terms of the rate with a Loan Disclosures and Loan Commitment before signing anything. If a lender is pressuring you to sign a loan immediately, either verbally or in writing, without confirming the terms of the loan with a Loan Disclosure and Loan Commitment, you should proceed with caution.
Be sure to read the fine print before signing your home loan contract.
When signing a home loan contract with a lender, you are agreeing to a legally binding contract that outlines the terms and conditions of your home loan. Before signing your home loan contract, be sure to read the fine print to make sure the terms are accurate and complete. If you do not understand something in the contract, ask questions. You should also ask questions if you do not understand something that the lender has told you.
Confirm that the interest rate is locked-in.
Some home loan lenders may verbally offer you a discounted interest rate. Before signing a home loan contract with a lender, confirm that the interest rate is locked-in at that level.
Find out what fees will be included in your loan.
Different home loan lenders may charge different fees. Before signing a home loan contract with a lender, be sure to ask what fees will be included in your loan. Some common loan fees are appraisal, application, and credit report fees.
Ask if you can modify or change your loan later.
Some home loan lenders allow you to modify or change your loan later if your financial situation changes. If you have a variable interest rate loan, you may be able to modify your loan if interest rates fall. If you have a fixed interest rate loan, you may be able to change the length of your loan if you need more time to pay it off.
Ask which real estate broker they’ll be working with.
Lastly, before choosing a home loan lender, ask which real estate broker they’ll be working with. The real estate broker, who is working with both you and the lender, can help make the home loan process as smooth as possible. Find out if the real estate broker is familiar with working in your area. Also, find out if the real estate broker has good working relationships with local lenders and other real estate agents. Working with a real estate broker can help save you time, but only if they are familiar with the local market.