About 65% of homeowners take out a mortgage to buy their homes. With property values increasing at a fast rate over the last two years, a mortgage is necessary to purchase the home.
When you’re buying a home, you probably spent a lot of time looking for the right real estate agent. It’s important to do the same with mortgage lenders.
After all, you’re going to stick with your mortgage lender for about 30 years. You need to make sure you can work with them for that long.
What should you look for in the top mortgage lenders? Read on to find out.
1. Types of Mortgage Lenders
In your search for mortgage lenders, you’ll find loan officers, brokers, direct lenders, and wholesale lenders.
Loan officers usually work for a financial institution, whether it’s a direct lender or a bank. They only offer loan products that the financial institution offers and they have to abide by the institution’s rules of lending.
A mortgage broker is like your mortgage concierge. They have relationships with different lenders and offer loan products from them.
They do the home loan shopping for you. They find the best product for your needs at the right interest rates.
A direct lender uses its funds to underwrite the loan.
A retail lender is a bank or credit union that lends money to borrowers. They offer other financial products, such as auto loans and CDs.
2. They Offer Different Mortgage Products
Mortgage lenders offer different loan products, too. Most will offer conventional loans. These are loans that meet the requirements of Freddie Mac, which is a federal institution that may purchase the loan later on.
Some lenders specialize in jumbo loans. This type of loan is more than the amount set by Freddie Mac.
Lenders that have a broad range of mortgage products will be able to find the right product for your needs.
3. Qualities of the Best Mortgage Lenders
You can find mortgage lenders that offer the same home loan for the same interest rate. How can you set them apart?
Have a list of questions to ask mortgage lenders. You’ll want to make sure you qualify for the loan before applying.
Lenders charge fees for originating the loan, which you should know in advance. Find out what to expect during the underwriting process. This is where the lender verifies your application and approves the loan.
Know how you should communicate with the lender. If they just send you to a random customer service line, see if you can get a name of a person to handle your account.
The most important piece is timing. A lender that’s slow could derail the deal. Be sure to ask about the average amount of time it takes to approve the loan.
Finding the Best Mortgage Lenders
Before you do a search for “mortgage lenders near me,” you should have a clear idea of what the best mortgage lenders offer. Hopefully, you learned a few tips to find a good mortgage lender to work with.
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