4 Tips To Jumpstart Your Mortgage Lender Search

Finding the right mortgage for you is only part of the overall search for a home. It can take time and a good amount of knowledge just to do this part so it is good to know where to start and how to keep your mortgage lender search going in the right direction. Here are some tips to help you get on the right path to finding the perfect mortgage lender for your home search.

1. Your Credit Score and History Come First

It is always essential to get to know exactly what your credit score is and exactly what is listed on your credit history. Many mortgage companies will have limitations or exceptions that deal with your credit score and credit history. Most lenders use an average score of 580 and above to consider qualifying home buyers for any type of mortgage. When your score is below 580, you may still be able to find a mortgage lender, but you should expect that your interest rates will be very high from the beginning.
If possible, it is better to take some time and work on raising your credit score. Take a look at your credit history in order to determine what exactly is bringing your score down. Get the advice of a credit counselor, whose job is to help individuals improve their credit score. They can help you take a look at each item listed on your credit history to see what steps you can take to improve your score.

There may even be items listed on your credit score that should not be there, so be sure that you check to make sure the information that is listed is actually correct. Sometimes the smallest details can have the biggest impact on your score. Always get reports of each of the major credit bureaus. Experian, TransUnion, and Equifax can give you a free report each year. These are the credit bureaus to use to understand your credit score and history in detail. Always report any errors that you see right away. Remember that if you have any existing loans or credit cards that have not been paid off, you should consider paying these off before looking into getting a mortgage. By paying off these amounts, you can help boost your credit score, but also make it so that you have more money available later on during the home buying process.

2. Get To Know Your Credit Lenders

Before you ever start searching for your mortgage lenders, you should get to know the options that you have as to which type of lenders you can chose. Here are the main types of lenders that you can consider when you are searching for the right mortgage.

Mortgage Bankers

With mortgage bankers, they will work with different types of financial institutions. The main point of mortgage bankers is to gather together loan packages to send to these financial institutions. These packages are usually reviewed by bank underwriters.

Mutual Savings Banks

Not many consider using mutual savings banks as a source for mortgage loans, but for some, this can actually give them an advantage. Most mutual savings banks only work locally and because of this, they have to compete with other lenders who may have competitive rates. In turn, this could lead you to being able to get a mortgage loan within your range when it comes to length and interest rates.

Credit Unions

At one time, credit unions were not considered by many because of the membership requirements that were involved. However, there are many credit unions who have realized they are losing out on possible clientele and have since lifted this requirement. Now there are more individuals who are able to get low interest rates and great service for their mortgage needs.

Correspondent Lenders

These are simply local loan companies that have the ability to offer you a mortgage package, but ultimately larger corporations will be handling your loan once the contract is signed.

3. Compare Rates

Never settle on the first lender that you come across. It is better to have a wide range of mortgage offers so that you can choose which one will be best for you. Start by researching the different types of lenders that fall under the categories stated above. Before you make your calls to each of these to either get information or set up an appointment to get information, be sure that you check the reviews on these companies.

If the company has a website, then check to see if they are part of the Better Business Bureau program. This is a great way to get reviews and to see what complaints may be present. You can get detailed reports of individuals who have used certain lenders and how their overall satisfaction was with those lenders.

Once you have your top rated lenders that you want to consider, it is time to get the information that you need. You can call or visit mortgage lenders if they are local and ask about the different types of home loans that they offer. Know what their typical interest rates are for certain individuals with varying credit scores, the length of the loans that they offer, and even their success rate with clients. It never hurts to get to know all that you can about each lender because you need as much information as you can to make the right decision.

Lastly, ask each lender, specifically, how they will go about helping you obtain a mortgage loan. The answer that you get from each could help you make your final decision because it will show you which lenders are confident about helping you and which lenders may not have enough experience to help you.

4. Question and Answer

There are a few more questions that you should have ready for your lender and these are the type of questions that get you direct answers on what you need to know:

  • What fees will you personally be responsible for at closing?
  • How long will the approval process take?
  • How long will the appraisal process take?
  • How long with the closing process take?
  • What type of communication do you use for your clients and how quickly do you respond?
  • Do you waive any fees?
  • What are your requirements for down payments?

Keep all of these questions handy when you research each lender and make sure that you are getting the answers that you want. This is a good way to narrow down your list. If you find too many answers you do not like or do not work with your specific situation, then you know to move on to other options.

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