Selecting a lender to finance your home is a huge decision that can significantly impact your real estate transaction. I highly recommend considering more than one lender before making a decision. It’s important that you feel confident in your lender, their rates and any applicable fees.
So what do you need to consider when choosing a mortgage lender?
What are the lender fees & estimated closing costs?
Lenders often charge origination fees, in addition to your interest rate and closing costs. Ask about lender fees in advance – this will help you make an informed decision about your lender and the fees that you will be paying.
Can you lock the mortgage rate?
If you’re concerned that interest rates may rise, ask your lender about locking in your rate, so you don’t have to stress about higher monthly payments. With a rate lock, your borrowing costs won’t go up, but they won’t decrease either if rates decline.
What is the closing timeline?
Mortgage applications go through several steps, some of which can extend the process timeline. Some mortgage lenders will outsource underwriting, while others have an in-house team. Talk to your lender about an estimated timeline and closing date.
Is a preapproval letter provided?
When buyers compete for homes, sellers are typically more willing to negotiate with a buyer who looks solid on paper. Most lenders provide an approval letter that conveys your status and borrowing limit.
Are they local?
One of the most important aspects to consider is working with a local mortgage lender! Working with a local mortgage lender has many advantages, including working with local appraisers and not an appraisal management company. Working with local lenders and appraisers will ensure a reliable partnership, a stable timeline and an overall positive experience.
Ultimately, you want to select a mortgage lender who acts as a partner, helping you make the best borrowing decisions and is committed to helping you secure your home purchase. I am always here to give recommendations and help along the way.