Choosing the right mortgage lender is challenging for many people looking for a new home. Changes in rates and fees offered by lenders can make a big difference to the buyer. When searching for the right mortgage lender, you must explore all the possible options available to you.
Here are 4 helpful tips for finding the right mortgage lender.
1. Get Your Credit Score in Good Shape
There are specific credit and income criteria to meet in order to purchase a home. A low credit score means that mortgage lending is a risk, and you’ll end up having a higher interest rate on the home loan.
Make sure your credit reports are accurate. Try to lower your debt to income ratio as soon as possible. Paying off credit cards before you buy a home will also increase your score.
2. Understand the Lending Landscape
There are a variety of resources to help you navigate the crowded lending field. Credit unions offer favorable interest rates to different shareholders. Mortgage bankers put their effort into a specific financial institution and provide package loans. Correspondent lenders are usually local mortgage loan companies that build your loan. Familiarize yourself with the options available to you.
3. Get Pre-Approved
Getting a mortgage pre-approval letter before looking at homes will give you an advantage. The letter shows that you’re a serious buyer whose loan is likely to close. It also shows that the lender has evaluated your finances and knows how much house you can afford.
4. Compare Rates from Mortgage Lenders
Start researching the rates from different mortgage lenders. Keep in mind that the rates or quotes you see online are just estimates. A lender will have to work on your credit information and process a loan application in order to provide an exact rate. Once you have numerous quotes in hand, compare those rates and choose the one that makes the most financial sense for you.
Need Help Finding a Lender?
Doing your homework on mortgage lending early on can set you up for success. If you want more information regarding mortgage lending, contact us at (616) 570-8864.