So, you’re ready to buy a house. You’ve been researching floor plans and neighborhoods. Maybe you’ve even found a real estate agent and have begun discussing your options. But, before you start touring homes and picking out paint colors, you need a mortgage lender. Choosing a mortgage lender is no small task, and it should be taken just as seriously as your choice in real estate agents.
Remember, you have the right to choose any mortgage lender you want - whether it’s a bank, a credit union, or a private mortgage company - you’ll be working with this company throughout the buying process and perhaps even for the next 30 years.
Out of all the pieces that go into the process of a mortgage, your credit score is likely to have the most impact. Your credit score will determine which lending institutions will work with you, the type of loans you qualify for, and even your interest rate and monthly payments.
Knowing and understanding your credit score is as easy as downloading an app. Your phone has a world of knowledge right at your fingertips. Apps like Credit Karma or Credit Sesame can provide you with an estimation of your credit score along with tips to help you raise and maintain it.
There are plenty of places you can get a mortgage, but probably the three most popular are a bank, a credit union, and a private mortgage company. All three have their pros and cons, but the most significant is the customer service.
Big banks are notoriously bad at treating their customers’ concerns with compassion and dignity. Because they offer so many services to so many people, it’s a lot harder to provide that genuine sincerity to each and every customer. Instead, their customers are often treated more like numbers instead of people.
Credit unions, on the other hand, are local not-for-profit organizations that handle a significantly lower number of customers. Plus, everyone who works there already lives in your area and knows the struggles in your community. Still, credit unions offer a ton of services - mortgages are just one of them.
Private mortgage companies can be both local and national, but will typically have branches in localized areas. For instance, Ruoff Mortgage operates nationally, but we have over 60 different branches that only serve the people in their area. Like with a credit union, you are going to be getting customer service from real people in your area and not a giant call center overseas. Additionally, private mortgage companies only offer one service: mortgages. This means they are highly specialized and much more knowledgeable about the process. The process is often much, much quicker, too, because every part of the lending experience is handled in-house.
The housing market is never static. It moves up and down all the time, and interest rates can change daily. One way to choose a mortgage lender is by comparing rates between the lenders you prefer. You can use websites like Lending Tree to do so, or you can call around and ask the lenders personally.
You can check back periodically to compare rates, or you can ask a loan officer at the lending institutions to notify you when a better rate comes along.
Just like when you chose a real estate agent, choosing the right loan officer should require some thoughts and discussions. Once you’ve chosen the lending institution you like best, make sure you are still able to choose a loan officer instead of being assigned one. Make phone calls or send emails to individuals or branches in order to find the right loan officer for you.
Take into account your communication style - do you want to work face to face? Over the phone? Exclusively over email? Find a loan officer who is willing to accommodate your wants and needs. Because you will be dealing with a large sum, it’s important that you feel comfortable with the person handling your loan - and that you trust them.
One of the last steps before your loan is approved and the house keys are placed in your hands is underwriting. Underwriting is the process of risk ...
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