For homebuyers looking for new mortgages and homeowners wanting to refinance, the challenge isn’t finding a mortgage lender, but sorting through all of the banks, online lenders and mortgage brokers who are eager to take their loan application. In fact, sifting through all of the available options and lenders can be daunting at best. In today’s financial environment, it is even more important to work with a company that can aptly address a homeowner’s specific home loan needs and desires.
When choosing a lender for a home purchase or refinance, there are several factors to consider. Where you get your home loan matters—it’s not just about the rate. Homeowners should choose a lender with a solid performance history for making smart loans—a lender with reputable lending practices who is accountable for the loans they make.
Banks that provide unified service to their customers through local loan officers, central credit underwriting and servicing departments can help find personalized solutions to fit every customer’s needs. There are several questions you should ask when deciding who the best lender is for you:
• Will you take time to find the right loan option for me?
• Who prepares the loan documents?
• Who regulates the lender?
• Will the lender sell either the loan or servicing of the loan, and if so, to whom?
Borrowers should also keep in mind that banks differ from brokers in terms of the loan rates they offer. Brokers may be able to provide what appear to be lower loan rates. They can also contain questionable terms that are unfavorable for customers. Brokers sell the loans they generate after customers have closed, leaving customers unsure of who they are dealing with after the sale is complete.
Beyond speaking with the particular lender, you should also perform a little investigative work on your own, such as consulting the Better Business Bureau to verify if a particular lender is in good standing and to find out if any complaints have been filed against them.
It is also prudent to check with a title company and ask if the lender has a reputation for increasing rates or fees at closing or if they are aware of any unethical or fraudulent behavior when the lender closes loans.
Regardless of whether you are buying a new home or refinancing, taking the time to research and feel comfortable with lender options is worth the effort. TPW