Choosing the first mortgage lender you find could be one of the biggest mistakes that you make. Mortgage lenders are not created equal. Each lender has their own guidelines and prices. If you don’t shop around, you could be throwing money out the window or be missing out on a great loan program.
But how do you know which lenders to trust? What’s the best way to shop around?
Using Online Reviews
The internet can be a great resource, but you should take what you read regarding reviews with a grain of salt. While many of the reviews you’ll see are legitimate, some may not. Even if they are legitimate, sometimes people post reviews in the heat of the moment, saying things they may not have meant after giving the issue a little time.
That being said, online reviews can help you. One of the best strategies to use is to read a large number of comments. This way you can see what the consensus is about a lender. If many people say that the lender is bad news, you would do well to stay away. If most people say the lender is good, though, you are probably in good shape to go ahead and use that lender.
Asking Lenders Questions Yourself
Even though you find a lender that has good online reviews, you should still do your own research. Following are some important questions you should ask of any lender before you choose them for your mortgage:
- What is your turnaround time? This will help you decide if they are a good fit for you. If they can’t turn your loan around before your contracted closing date, you’ll need a different lender.
- Do you service loans in-house? If the lender doesn’t service the loans, you’ll want to know who services them. You should then do your research on the loan servicer to make sure they are someone you want to handle your loan.
- How do you handle interest rate locks? Do you charge for the lock? How do you handle expired interest rate locks? These are all important details that you’ll need so that you can know if a lender is a good fit for you.
- How do you communicate the needs for the loan? Does the loan officer call? Do you have to check in for updates?
- What happens if the appraisal comes in low? Some lenders just take the appraiser’s word for it and decline the loan. Other lenders have an appraisal review department that handles the low appraisal to see if there’s anything they can do to get your loan done.
Ask Friends and Family
Of course, don’t forget one valuable resource you have at your disposal – your friends and family. They can help you know how a certain lender or mortgage broker is if they’ve used them. Make sure to ask around, especially if you know someone that has recently bought a home or refinanced a mortgage. Sometimes in-person referrals and reviews are the best ways to get the answers that you need.
Finding the right mortgage lender requires you to do some legwork. Make sure you use the internet, friends/family, and your own research to help you choose the lender that is right for you.