The time has come and you’re ready to start looking for a new home. Before you start house hunting you’ll want to find an experienced mortgage lender to guide you through the financing process, making it as smooth and efficient as possible. A mortgage lender will explain the process of financing a home, get you pre-qualified so you can make a confident purchase offer and will be there to help you get the best loan for your situation all while coming through for you on closing day. With a plethora of mortgage companies out there offering financing options, it can be overwhelming to determine which lender could best help and guide you as you make one of the biggest investments of your life. By considering a few key factors, you’ll determine which mortgage lender is right for you and be on your way to getting a mortgage and ultimately homeownership.
Local vs. Online
First you might want to consider whether using a local lender or an online lender is best. You may even wonder, what’s the difference? A local lender will most likely have a physical location close to or in the town you’re purchasing a home while an online lender will operate completely online and over the phone. Online lenders boast the convenience of online mortgage applications and a fast turnaround, yet local lenders can typically provide the same speed and convenience, plus they know and understand the local market.
Referrals & Online Reviews
Chances are you have family, friends or coworkers that have purchased a home before. Generally, they are happy to share how their home financing experience went and most importantly, how it could have gone better. Whether their experience was good, bad or just flat out ugly, listening to the experiences of those you trust will help guide you in the right direction.
If you’re still unsure after chatting with friends and family, check out what past borrowers say about lenders online. Just as you would read reviews on blenders, cameras and shoes, you can do the same for mortgage lenders. With a variety of online review sites, you can easily read about the experiences of other borrowers that were willing to share. They’ll either give you the warm fuzzies or you’ll know who to cross off your list.
Take Advantage of Free Consultations
After you’ve narrowed down your search, reach out to the mortgage lenders on your list to set up an initial meeting. Most lenders will offer a free, no strings attached consultation to discuss their mortgage offerings. Whether you’re a first time homebuyer or repeat buyer, this can be extremely helpful to get a run-down of the home financing process. Plus meeting with a lender, whether it be in-person, on the phone or via video conference, will give you a feel for them and help you decide if you’re interested in working with them.
The initial meeting with a mortgage lender is a perfect time to gather information about their product offerings. Here’s a few things you’ll want to ask:
- Home Loan Programs: Does your potential mortgage lender offer a wide vary of loan programs including both conventional and government backed loans? What about programs for First Time Homebuyers? Can they describe the differences between each loan program and which would work best with your financial situation and why?
- Downpayment: How much money will you be required to put down towards your future home and are there any downpayment assistance programs available? Ask what your potential monthly payment, including insurance, looks like after factoring in your estimated purchase price and downpayment.
- Interest Rate: Your credit score will largely impact your interest rate, but shopping around for the best rate doesn’t hurt. Ask your mortgage lender for more information on their current rates.
- Application Process: You’ll want to know how the application process shakes out from the second you hit submit on the online application through closing day. How will your lender communicate with you? What kind of timeline are you looking at to close and is there a potential for delays?
- Fees & Closing Costs: Mortgages come with fees and closing costs, but they can vary by the financial institution and some lenders can even offer closing cost assistance for qualified borrowers. You won’t know exactly what your closing costs and fees will be during your first meeting, but a mortgage lender should be able to provide you with an overview of what they typically see and charge.
Selecting a mortgage lender and knowing the right questions to ask can take some research and time, but you’ll be thankful for your efforts as you make one of the biggest investments of your life. Buying a home is definitely a big deal, but with the right mortgage lender by your side it doesn’t have to be a hard process. Schedule a free consultation with one of Town & Country's local mortgage experts in Fargo or Minot to get started today!