Purchasing property is a huge investment. Whether this is your first home or you’re an old pro in the real estate market, it can be daunting to throw so much money into a single purchase. Most people do not have enough to pay for a property in cash. Therefore, a mortgage lender is instrumental in most real estate transactions. By choosing the right mortgage lender, you can ensure that your transaction goes smoothly.
First and foremost, it is important to make sure that the mortgage lender with which you choose to work is reputable. This lending company doesn’t have to be the biggest or most popular in town, but you need to protect your investment. Do a bit of research. Call your state’s department of labor and the Better Business Bureau to see if there have been any complaints against the company. If there have, proceed with caution.
Certain things can also tip you off that the mortgage lender is probably not the right company for you. Most importantly, the mortgage lender should disclose all information about pricing with you. When you take out a mortgage loan, of course the lender is not going to give you the money for free. Interest is how mortgage lenders make the vast majority of their money. A mortgage lender may not be able to quote you an exact interest rate, as this will change according to the date of closing and your credit history, but you should get a ballpark idea. Any mortgage lender not willing to discuss this with you may be hiding something, like an unfair balloon interest rate. This isn’t always the case, but be suspicious.
In addition, a mortgage lender should be willing to give you a document completely outlining all of the closing costs associated with your mortgage. Closing costs are fees that you must pay based on costs incurred during the real estate transaction. These costs may include document preparation, underwriting, appraisal, travel expenses, title transfer fees, and insurance, among other things. If your potential mortgage lender doesn’t have information prepared for you to outline the closing costs, you should consider using a different lender. All good mortgage lenders should be willing to give you a “Good Faith” estimate, which includes the current interest rate and closing cost prices.
Of course, while working with a trustworthy company should be your main criteria for choosing a mortgage lender; this isn’t the only factor that needs to weigh in on the decision. It is important to find a good price as well! Don’t be around to shop around before choosing a mortgage lender. Are there multiple lenders in your community offering the same interest rate? If so, delve into closing cost prices. You may also see differences in the terms and agreements – even the smallest discrepancies can make a huge difference in your life over time.
Also, talk to your mortgage lender candidates to find out how much money you’ll qualify to receive. Some lenders aren’t willing to take a big risk, and if you don’t have enough money to cover the rest of the price with a large down payment, you may not be able to purchase the real estate you want. Every lender is a bit different. However, even if you have less than perfect credit or are looking for a very large loan with a very low down payment, you should be able to find options in your neighborhood. There are options for everyone if you look long enough.
Lastly, your mortgage lender should be personable. For most people, mortgage last at least twenty years. Some mortgage loans are repaid over even more time, and this can increase with refinancing. Look for a mortgage lender who is on your side. Yes, mortgage lenders want to make money with your interest and, if possible, late fees, but if you’re new to the real estate market, a good mortgage lender will walk you step by step through the process of apply for and receiving a mortgage loan. If you don’t feel comfortable around a certain mortgage lender, look for other options.
Not everyone is lucky enough to get a good mortgage lender. In all actuality, however, finding that person lender is less about luck about more about doing your homework. Mortgage lenders come in all shapes and sizes, and the company that works for you friend may not work for you. Before you begin working with the first mortgage lender you meet, take some time to determine that this really is the best choice.