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What to look for in a mortgage company

Craig Berry
The Mortgage Reports contributor

In this article:

When looking for a mortgage company, there are several factors to consider:

  • Which company offers the most competitive rate and lowest costs?
  • Does this company have a good reputation? You can often find company reviews on Yelp, the Better Business Bureau, and Consumer Affairs. You can also ask friends, family, and your real estate agent for recommendations
  • How does the lender normally communicate with their clients, and how often? Do you feel comfortable discussing personal financial information with the lender? Also ask if you will you be working with the same person throughout the full process, or if you’ll be working with multiple people within the company.

For most borrowers, the best rates are the primary factor when considering a lender, but finding a lender who is both helpful and responsive could make or break your home buying process.

Verify your new rate (Dec 14th, 2018)

Get personal referrals

One of the best ways to find a great company is by asking around. Friends, family, neighbors and real estate agents are a great source for this.

If you’ve never directly asked for a referral online, try Facebook for tons of virtual referrals. You will have no shortage of comments directing you to someone they’ve either used or know personally.

After you get some names and numbers, go deeper in your quest. Find out if the transaction was similar to yours — size of loan, purchase or refinance, etc.

Ask lots of questions and don’t be shy about finding out not only what they liked, but also what they didn’t like about the company.

Should you use your real estate agent’s “preferred” lender? You can, but subject them to the same inspection you give all other lenders, and make sure their quote is competitive.

Compare mortgage rates

Nowadays, your cell phone, your tablet or your computer can the quickest and easiest way to request referrals.

If you’re like most people, the interest rate and costs of the loan are a main consideration. You can get multiple mortgage quotes from competing lenders by making one single online request.

Lenders usually provide an official Loan Estimate (this provides consumer protection) or some sort of worksheet or scenario (not as binding as a Loan Estimate).

It’s important to get all your rate quotes at about the same time because interest rates can change frequently — even more than once a day!

Compare offers, select a few of the most competitive, and then check out the lenders. Call them all and ask the loan professional what product he or she recommends for you, and why. If you think you might have trouble qualifying, ask about minimum credit scores  and overlays.

  • Are you comfortable discussing finances with this person?
  • Is he or she knowledgeable enough to recommend a product and tell you why?
  • Are your calls returned promptly?

Getting a mortgage can be stressful. Choose someone who will make that experience good for you.

Choosing a mortgage lender

What’s important to you may not be the same as what’s important to someone else.

For your friend or neighbor, their decision may have been because the mortgage company had the lowest rate and closing costs. But you may place more emphasis on accuracy, efficiency and timeliness. This could be especially true if you need to get your loan closed inside of 30 days.

Some mortgage companies, especially online companies, may be great at refinancing but not quite as strong when it comes to purchase transactions.

Check out their reputation

After you’ve gathered names and contact info from your friends, family or real estate agent, look them up.

Thanks to today’s technology at your fingertips, it’s easier than ever to conduct your own research on a mortgage company.

Some popular sites for today’s consumer seeking online reviews include the following:

  • Yelp
  • Better Business Bureau
  • Consumer Affairs

Look out for things such as the number of loans in default, predatory lending complaints, and customer feedback.

The National Multistate Licensing System (NMLS) for mortgage lenders offers a consumer portal you can use to verify lenders’ licenses and see if there have been disciplinary actions against them. You can also view loan professionals’ employment history, which can tell you the extent of their lending experience and how many times they change jobs.

Online reviews aren’t always 100 percent accurate, but it can at least give you a frame of reference, especially if the mortgage company has more positive than negative feedback.

Ask about the mortgage company’s process

Not only do mortgage companies come in many shapes and sizes, the way they conduct business varies greatly.

Big brand mortgage names aren’t necessarily better than smaller, less known companies.

Ask the lender how they typically communicate with their clients (email, text, phone calls, etc.) and how often.

Inquire about whether the lender does everything “in-house” or otherwise.

Some lenders take the initial loan application, handle the loan processing, the underwriting, even the preparation of the closing documents in a centralized location.

Other lenders may take your loan application and gather your income and asset documents, but then turn everything over to another location.

This isn’t always a bad sign, but it’s worth investigating. It could have a significant effect on your loan is processed, and the amount of time it takes to get your loan completed.

What are today’s mortgage rates?

Finding a great mortgage company involves more than just getting the lowest interest rate and closing costs.

The best mortgage companies typically offer competitive rates, are accessible online, have quick and adaptive communication methods, and are readily available when you need them.

Verify your new rate (Dec 14th, 2018)