What to Look for When Shopping for a Lender
What’s Most Important when Shopping for A Lender?
Interest Rates are Not the Most Important Reason to Choose a Lender…
When you are shopping for a new mortgage, it’s difficult to sort out the different offers you will find out there. The best interest rate may not always be the best loan for you. There are very important considerations beyond rates and fees when comparison shopping. Customer service, lender experience, and a company’s track record all contribute to your satisfaction in obtaining your loan. You should look for an experienced lender working FULL TIME in the business. Remember you want a lender with several years’ experience and not one with just a few months experience several times.
Once you have an accepted offer on a home, you have a specific deadline in your purchase contract to have your loan approved and closed. If your lender does not have the ability to close your loan on time, you could lose your dream home and the inspection and appraisal fees you have already spent in the process. Choose to work with someone with competitive rates and fees, but make sure they can actually close your loan “ON TIME” or the process will be a bad experience for everyone.
Comparing Interest Rates
There is no RATE SHEET that you can use for comparison, as each loan is priced daily according to specific borrower qualifications, credit scores, down payment, loan amount and other criteria. Make sure you are making an apples-to-apples comparison by using same-day similar rates and fees for identical types of mortgages. Conventional mortgages, VA, FHA and USDA all have unique requirements and it’s best to talk with a mortgage professional to help you sort through the maze and determine which program is best for you.
Interest rates have a direct relationship to lender fees. The lower the interest rate, the higher the lender fees will be. There is no free lunch out there and money costs about the same from Lenders that sell directly to Fannie Mae and Freddie Mac. Customer service is often much more important than a few dollars difference in lender fees or a fraction on an interest rate. A lender needs to be large enough to have the ability to fund your loan to meet the terms of your purchase contract, but not so big that you and your loan get lost in the shuffle.
So how do you know who you can trust? A friend that has recently purchased a home or refinanced would be a good source for a referral to a good mortgage lender and a Realtor as well. They could also steer you away from someone that they had a bad experience with. Your Realtor can be a good person to refer a lender, but always rely on your own instinct to determine if that person is a good fit for you. If your Realtor wants to negotiate the purchase of your home and then wants to be your lender, that should be a RED FLAG and you should look for an alternative source.
Envoy Mortgage and Doug Bullwinkel only provide Home Mortgages and we do not sell homes or assist buyers in locating properties to purchase. Rely on a licensed, professional Realtor in your area to represent you in your home purchase.
For a no obligation consultation, please contact Doug Bullwinkel at dbullwinkel@EnvoyMortgage.com or call him at 916-295-0044.