How to find the best mortgage lender
When buying or refinancing real estate, obtaining the lowest interest rate is important. However, there are other equally vital aspects of your home loan. For example, finding the best mortgage lender.Verify your new rate (Jun 2nd, 2020)
7.3 million mortgages
With more than 7M mortgage loans on U.S. residential properties in 2016, the mortgage industry is a booming business with many lending institutions from which to choose.
Oddly, however, according to the Consumer Financial Protection Bureau, nearly half of mortgage borrowers do not take the time to shop for the best mortgage lender.
When it comes to obtaining a mortgage, one size doesn’t fit all. Not every lender can offer loans in every state.
Additionally, some lenders offer programs that others don’t. That’s why it’s important to interview several lenders, and see what programs they recommend for you and why.
Online or brick and mortar?
Technology continues to make shopping from the sofa in your living room an easy task. In 2015, a Fannie Mae survey found that over two-thirds of consumers would like to get their mortgages online.
Using an online lender could be ideal for you and your situation, especially if time isn’t on your side.
Working with online lenders can be less time-consuming when applying for a loan, as everything is done paperless and online.
In addition, the lack of branch offices may mean less overhead. Lower operating costs can result in lower rates and fees being passed along to you as the consumer.
Online lenders can save time and money. However, homeowners should be sure and do their homework when limiting their mortgage search to just online companies.
To avoid scams. don’t respond to questionable unsolicited offers. It’s illegal, for instance, to advertise an interest rate without also including the loan’s APR, which includes its total cost. Lenders should also include their licenses on any pitch they make to you.
And so-called “triggers,” like “payments as low as…” or “just a $300 origination fee!” without disclosing the terms of the loan, are illegal. And advertised rates must be actually available, not just bait and switch tactics. Don’t work with a lender that does this.
Exercise caution because you don’t know who is on the other end of an online interaction. And don’t give out your Social Security number or other identifying information until you have decided to work with that lender and verified that it’s licensed, genuine and reputable.
Be sure and perform your necessary due diligence by researching the company with whom you plan to apply. The good thing about doing business with an online company is that they’re typically pretty easy to research… online!
Another aspect to be aware of is that, unlike your local bank, credit union or mortgage lender, you can’t walk into the office of your online lender. The availability of online lenders may be different than a company with a physical location.
Vetting your mortgage lender
Getting a mortgage loan can be complex. You’ll want to make sure you have the right lender to carefully guide you through the process.
First, make sure any lender you deal with is licensed in your state. You can check their licenses online at the Nationwide Mortgage Licensing System. The site tells you if any disciplinary actions were filed against the licensee.
When deciding on a lender, it pays to do your homework and ask the right questions.
Questions to ask a mortgage lender may include:
- How long has your company been in business?
- How long have you (the mortgage loan originator) been in business?
- Does your company have in-house processing and underwriting?
- Are there any upfront application fees or other costs?
- What is your availability?
- What type of response times can I expect on return phone calls and emails?
- How much time should I expect it to take to get from application to closing?
In addition to asking your lender questions, you will want to work with a lender who asks you plenty of questions.
A lender that takes the time to learn about your needs, explore several options and personalize the experience to accommodate your situation is a good choice.
What are today’s mortgage rates?
When you take on a mortgage, you’re committing to up to 30 years of repayment. It pays to shop around to find the best mortgage lender.
To make sure you’re getting the best deal, be sure to take your time, do your research, and compare rates and terms.Verify your new rate (Jun 2nd, 2020)