How to Choose the Right Lender

When it comes time to shopping for a mortgage, I would strongly encourage you to start with a local and trusted lender. - Jonathan Fox - Washington Post

You can't get any clearer than that. Big business, large corporations, and big banks have been selling and buying mortgages for decades but when it comes to the individual homebuyer, going local, and going personal is always best.

It's surprising how little value many homeowners, especially first-time homeowners, put into shopping around for the best home loan. They should be just as careful about this process as they are the home itself. However, many people simply go with whomever the real estate agent suggested or the local bank. While this might work out just fine, you can really benefit from shopping around for the best loan, the best rate, and the best terms. These really do change and you want to make sure that the lender knows you are shopping around. People get competitive when they know that they have others to compete against.

Terms, interest rates, and details of a mortgage loan are not always set in stone. You would be surprised at what you can actually negotiate with. Everything is important when it comes to dealing with contracts including inspections, timelines, and of course, who you are dealing with.

Mortgages in today's society are getting easier but we still need to be cautious about applying for the right home loan and only applying for a mortgage we can actually afford. In order to avoid a housing bubble burst, living within our means is really the key to maintaining our home and living comfortably with the mortgage we have.

Large banks, credit unions, and even hometown banks can be a great partner in managing basic financial details such as your checking and savings accounts or even credit cards. But when it comes to borrowing money for a large purchase such as a house, finding a mortgage officer the deal specifically with this type of loan is essential to getting the best rate.

Competitiveness also plays a big factor in getting the right loan for your needs. Shop around to a couple of different loan officers or mortgage brokers as well as your own bank or credit union. Find out what terms you can expect and different programs that different mortgage brokers can provide. Housing markets are competitive so lender should be as well.

Terms and prices are not the only factors when it comes to choosing the right lender. Large banks that have multiple mortgage officers can tend to bog down the system, extending out timelines and deadlines that could cost you your home. Individual and private mortgage lenders and personal loan officers have more invested in the game, so they are more likely to pay attention to timelines and get things done in a timely fashion.

Here are 5 Expert Ways to Shop for a Mortgage Lender:

Compare Interest Rates and Loan Terms:

• Start by researching current mortgage interest rates and loan terms from various lenders. Use online comparison tools and websites to get an idea of the rates available in your area.

• Understand the difference between fixed-rate and adjustable-rate mortgages and decide which type suits your financial situation and long-term plans.

1. Check Lender Reviews and Reputation:

   • Look for customer reviews and testimonials about different lenders. Websites like the Better Business Bureau (BBB), Consumer Financial Protection Bureau (CFPB), and online review platforms can provide valuable insights into a lender's reputation.

   • Ask friends, family, and colleagues for recommendations based on their personal experiences.

2. Consider Local and National Lenders:

   • Explore both local and national lenders. Local lenders may offer personalized service and knowledge of the local real estate market, while national lenders might have a wider range of mortgage products and potentially competitive rates.

   • Credit unions and community banks can also be excellent options to consider.

3. Evaluate Customer Service and Communication:

   • Reach out to lenders you're interested in and assess their customer service. Pay attention to how responsive they are to your inquiries and how well they communicate the details of the mortgage process.

   • Ask questions about the application process, documentation requirements, and the timeline for loan approval.

4. Compare Closing Costs and Fees:

   • In addition to interest rates, compare the closing costs and fees associated with each lender's mortgage offers. These can vary significantly from one lender to another and can have a substantial impact on the overall cost of your loan.

   • Request Loan Estimates (formerly known as Good Faith Estimates) from multiple lenders, which provide a breakdown of costs associated with the loan.

Bonus Tip: Prequalify or Get Preapproved:

• Before making a final decision, consider getting prequalified or preapproved for a mortgage from a few lenders. Prequalification gives you an estimate of how much you can borrow, while preapproval involves a more thorough evaluation of your finances and provides a conditional commitment from the lender.

• Having prequalification or preapproval letters can make your offer more attractive to sellers when you find a home you want to purchase.

It's Okay to shop around. Don't worry about your credit getting hit. Having the loan officer run the numbers for you and then offer you the best plan and wait for your needs is essential to getting the right loan and saving you as much money as possible. Contact the Novak Team at any time for reliable and experienced mortgage lenders in the Everett Washington area.