How to Select a Mortgage Lender
Congrats – you’re buying a new home! Your home search may have taken you from vibrant main streets to quiet cul-de-sacs and leafy country lanes. You may have looked at dozens of handsome ranches and stately Colonials, vintage Victorians and trendy townhouses. And finally, you’ve found that perfect place to call home. But don’t celebrate just yet because the search isn’t over: now it’s time to figure out how to select a mortgage lender. Specifically, you need to know how to pick a mortgage lender that offers more than just an attractive interest rate so that buying a home is as easy and stress-free as possible.
You already know you need a home loan, but where should you look for the best mortgage lenders when the choices are seemingly endless? Here are some tips for savvy consumers interested in selecting a mortgage lender in North Carolina:
Starting Your Mortgage Lender Research
- Go online and compare interest rates, but be aware that the stated rate on a mortgage lender’s website is only a starting point. If your credit score is low, you’ll pay a higher rate for your mortgage loan. On the other hand, there are numerous ways to get a discounted rate – from paying points to changing your payment frequency.
- Check out online reviews of various lenders. The real estate site Zillow, for instance, has hundreds of thousands of lender reviews.
- Seek recommendations from friends or relatives who have been through the process, or from professionals such as financial advisors, attorneys or real estate agents.
Understand What Differentiates Mortgage Lenders
- After narrowing the field, contact loan officers at select institutions to get a sense of the personal attention you’ll receive. The loan officers at Piedmont Advantage Credit Union take time to listen to your specific needs and goals while forming a meaningful relationship with you.
- Go beyond the interest rates and get a detailed breakdown of mortgage closing costs. Fees paid for home appraisals, title searches, legal services and interest rate reductions (known as “discount points”) can total thousands of dollars. Piedmont Advantage Credit Union and other lending institutions provide good-faith estimate documents allowing consumers to compare these costs.
- Timeliness is another factor. Most lenders will lock in the interest rate that’s in effect at the beginning of the application process. Find out how long the rate lock-in period lasts. If you have a deadline for moving, you’ll also want to know how quickly the mortgage lender will make a decision regarding your application and then set a closing date.
Get the Details
- Loan officers have a wide range of training and experience. The loan officers at Piedmont Advantage Credit Union can expertly analyze your financial situation and offer appropriate mortgage options that fit your lifestyle and budget. Would a 15-year mortgage better suit you than a standard 30-year loan? Might you qualify for government programs that offer lower rates to veterans or favorable terms to first-time homebuyers? We’ll help you figure out everything.
- Find out whether the mortgage lender services its own mortgages or sells them to larger financial institutions. If your loan will be sold, it could be more difficult to track down someone who can help you with any future problems.
Considering an Online Mortgage Lender?
- The Web has exploded with companies touting great rates and lightning-fast closings. Some online companies are faster and cheaper. But many offers are truly too good to be true.
- How do you find the best online mortgage lender? Read online reviews, check Better Business Bureau ratings and go beyond the media ads to confirm interest rates and closing costs. Some consumers get weeks into the application process before learning they don’t actually qualify for the specially advertised rate.
- Experts say that online lenders tend to be more forgiving to those with subpar credit scores. But communication with these lenders can be a challenge. There’s no specific loan officer assigned to handle your application and inquiries are likely to be fielded by someone in an impersonal “call center.”
Knowing how to choose a mortgage lender in North Carolina can take a little work, but it’s definitely worth investigating all the options. After all, you’re not just trying to get a good mortgage, you’re taking a necessary step toward moving into your dream home.