Financing a home is a decision that will most likely affect your budget over the next thirty years. Many homeowners focus on finding the right property or comparing different types of loans, but pay very little attention to which lender they borrow from.
Choosing the right mortgage provider can help you save money and avoid any stress that could be caused by poor customer service or billing errors.
There are a few things to be aware of if you are looking for a mortgage:
- Some real estate agencies work with lenders. This option might seem convenient at first, but itâs important to understand that the lender and the real estate agency benefit from working together and might not provide you with the best financing option.
- There are many affordable online mortgage providers. These services claim they can offer lower fees and rates because they save money by operating online. Rather than just believing their statements on face value, consider mortgage providers with regular, physical locations as well. Plus, itâs a good idea to see if they have good customer service.
- Some companies are actually mortgage brokers and not mortgage providers. Pay attention to how a company describes its services and look at the terms of the loan youâre interested in to find out whom youâre actually borrowing money from.
Do not fill out an application until you know more about the reputation of a mortgage provider.
Follow these steps to find a reliable lender:
- Ask friends, relatives, or your coworkers for a referral if you know someone who recently financed a home. You can also get referrals from realtors, accountants, attorneys, and other professionals.
- Check the local Chamber of Commerce and Better Business Bureau. This is a good way to find out about complaints filed against a lender.
- Look for online reviews. Try to find reviews from several sources to get a more accurate idea of the quality of the services offered.
- Read the lenderâs official website. A reliable mortgage provider should have a detailed mission statement, a list of the services offered, contact information, and a history of their company.
- Call the mortgage providers youâre interested in. Ask them a few questions about their loans and policies. A reliable lender will take the time to answer all your questions without pressuring you into applying for a mortgage. They will ask questions about your finances and your ability to make monthly payments to help you select the best financing option.
The best way to compare mortgage providers and loans is to ask for a Good Faith Estimate. This document provides you with all the relevant information about the loan youâre interested in, including the interest rate, credit check fees, closing costs, property insurance rates, taxes, attorney fees, and the amount of your monthly payments.
Taxes and insurance are usually the same from one lender to another, but comparing interest rates and other fees will help you find a financing option that is a good match for your budget. A reliable lender will provide you with this document right away.
Select a lender that offers a loan that will help you meet your financial goals. For example, you might like a financing option that makes it possible to have your home paid off within a certain number of years. You could also look for a loan with monthly payments that donât exceed a specific amount.
Once youâve found financing options that match your goals, focus on comparing the reputation of the lender and the quality of their customer service. Taking the time to compare lenders is important, since borrowing from an unreliable company could result in additional costs and a lot of stress in your future.