Mary Harmon Young
Mary Harmon Young

Finding the right lender!

One of the primary details in any home buying process is how you plan to pay for the home.  That is why it is so important to work with a lender that understands the process.  Many people think what’s the difference? Who ever can get me the best interest rate wins! Think again. There are many factors you should consider in choosing a lender. When chosing a lender, here are a few tips to consider in making a decision:

1) Is the company you are considering a Mortgage Broker, Mortgage Banker, Bank or Credit Union?  Understanding the difference between types of lenders will help you make a more informed decision in choosing the best fit for your needs. A Mortgage Broker can shop your loan with many larger lenders but do not lend their own funds. A Mortgage Banker does lend their own funds, but may be limited in the programs available. The Mortgage Banker will probably not collect the payments on the loan. They will sell the loan to a larger company. A Bank also lends their own funds and will probably collect the payments on the loan. They may have more strict lending guidelines than a Mortgage Bank. A Credit Union will also lend their own funds, may collect the payments but may also be limited in the programs available.

2) How long has the Loan Officer been doing Mortgage Loans? Experience in understanding the loan programs and the best loan for your situation can save you thousands of dollars up front as well as over 30 years!

3) Does the Loan Officer listen and understand your current financial position? It is important you are working with someone that can offer solutions to problems you may be facing. From credit issues, money for a down payment, time on your job,  a good Loan Officer will be able to provide advice on the best approach in handling every situation. There are programs available for with people with credit scores as low as 620, they will be able to advise you on how to improve your credit score. They will know the programs available for 100% financing in your area as well as which programs may allow gift funds.

4) Interest Rates and Fees. Most Lenders are competitive in rates. Compare rates with different lenders and the costs associated with obtaining the loan. The thing that may vary greatly is fees. It is a good idea when shopping for a mortgage loan to ask for a Good Faith Estimate of Costs to compare what charges the lender may be charging. Settlement fees, title fees and recording fees should remain consistent but may vary by a small percentage. Once you are in escrow, these fees will be determined and should not increase.

5) Time periods. Understand how long it will take your lender to process, underwrite and close your loan. Make sure they are able to comply with contract dates or make your offer according to the time frame it will take your lender to complete the process. You do not want to face penalties from the seller for not closing on time. The Loan Officer should be able to tell you from beginning to end what to expect. Do not be left in the dark, this is YOUR loan. You should not ever have questions about where in the process you are.

These are just a few points to consider when looking for a lender. Any one of these items if not handled by a professional could be costly in your transaction or cause the loan to go south at the last minute. Working with a qualified Loan Officer at a reputable company will ensure less stress on your part. In addition, you should feel comfortable with this person. You are entrusting them with every aspect of your income and assets and you want to know the information will be kept confidential and handled with care. You wouldn’t buy a car without driving it; you shouldn’t get a loan without interviewing some lenders!

If you have any questions or need assitance in finding a lender, please feel free to contact me!