5 Tips When Choosing a Mortgage Lender

5 Tips When Choosing a Mortgage Lender

Choosing your mortgage lender is a large step towards buying a home. However, before you start looking at houses and before selecting a realtor or real estate agent, you have to get approved for a loan, or you won’t be taken seriously.  It might be nerve-wracking to talk about your financial situation like this, but it’s vital to the process.

Here are five tips to follow when you’re choosing your mortgage lender!

Know Your Credit Score and History

Coming into this with as few surprises as possible is a big goal.  You can achieve this by getting to know your credit scores (all three of them!) and what your credit history looks like.  Although it’s possible to get a loan when your score is less than 700, you should try to work and get your score above that line so that you can avoid steep interest rates.  It might put off your plans by six months to a year to build it up, but it could save you tens of thousands of dollars.

Ask For Information on First Time Home Buyer Programs

Many states have first-time homebuyer programs with special grants to encourage people to buy a home.  Even more fantastic, there are programs and grants aimed at specific professionals like teachers to thank them for the line of work they chose.  Talk to any potential lenders about assignments along these lines, and see what information they know could help you.

Look For Lenders Who Work With Government Loans

Although plenty of lenders go through banking and business loans, working with someone who lends through government loans is the best choice.  These lenders will be able to give you the best rates, nearly guarantee the loan if your credit is good enough, and are a little more official than others.  Although no lender’s flawless, some lenders are better than others.

Shop Around for Interest Rates and Prices

Just as you shouldn’t buy the first home you set eyes on: don’t sign with the first lender you speak to simply because they got to you first. Instead, shop around, and try to find someone who will give you what you deserve at an interest rate that’s more than manageable for you. 

Some may feel awkward interviewing and shopping around to find the perfect fit, but this decision could shape the next ten to thirty years of your life: it’s okay to be picky.

Get Approved Before You Shop

It would help if you got approved before you look at a single home.  Before you pull out a house payment calculator and talk to a real estate agent, try to get approved for a loan.  This will streamline the rest of the process and ensure that everyone takes you more seriously, from your agent to the sellers.  Avoiding this extra footwork until the last minute could make you lose out on a home if the other offer already has the money on the table.  Don’t risk your dream home by skipping this step.

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