Thursday October 29, 2015
Before you start searching for your new home, make sure you know how much you are qualified to borrow. Not only will this knowledge help you focus your house hunting on the right properties, but pre-qualifying gives you more leverage when a seller knows you can get the mortgage to buy their home.
The first step is to select the right institution. Here are some tips on how to select your mortgage lender. You might be tempted by the lure of low interest rates and no closing costs, but protect yourself by ensuring you work with a reputable, responsive, and experienced lender.
- Ask for referrals. Your Realtor can offer suggestions for mortgage lenders that meet your particular criteria (e.g., first-time homebuyer, FHA or VA loan). Talk to family members, friends, and co-workers who have recently purchased a new home about their experience with mortgage companies.
- Check references. Look at online reviews to see what others are saying about the mortgage lenders. Check the Better Business Bureau’s ratings, which include any complaints lodged against the company. Be sure that the lenders you’re considering have the necessary licensing.
- Interview the lender. If you apply online, you will be instantly deluged with phone calls. When you speak with the representatives, ask about the various loan products they offer, and the pros and cons of each. Discuss the approval and closing process, so you understand the information and timing that will be required. Ask for a written list of the costs and fees associated with the mortgage, like points, legal fees, title insurance, and closing costs. Explain your situation and ask for a recommendation about the right mortgage.
Here are 25 questions that Zillow suggests you should ask your mortgage lender.
Once your questions have been answered, ask yourself a few questions. Did the lender seem knowledgeable? Did they listen to your concerns and address them clearly? Did you feel like you were getting a cookie-cutter response or truly personal attention? Did the lender seem to push you towards borrowing more than you feel comfortable with? This is a major financial commitment, so you need to work with a professional who takes the time to understand and respect your needs and concerns.
4, Compare rates, fees, and products. Once you have gathered the information, look at what each mortgage lender has to offer. Your choice should reflect your needs. If you don’t have a stellar credit rating or a sufficient down payment, consider a lender who understands your situation and can offer guidance to qualifying for the best option possible. Maybe you’re looking for a VA loan. You should find a lender who has experience navigating this process.
Before you pre-qualify for your new home mortgage, pre-qualify the lender!