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How To Choose a Mortgage Lender

One of the biggest challenges of buying a home is choosing the right lender. As with any big purchase, you should shop around for the best deal. Fees and terms can vary widely from lender to lender which can greatly influence how much you’ll pay each month. But with so many choices in lenders, how do you find the one that’s right for you? Here’s what you should consider.

Know where to look

First things first — when you’re shopping for a mortgage lender you need to know where to look. There are many kinds of companies that offer home loans. These include:

Be prepared

When shopping around for a mortgage, you need to be prepared so you’ll get the best deal possible. Check your credit report and take steps to improve your credit score. Save for a down payment and be able to prove that you have a stable income to afford your monthly payments.

Ask the right questions

Some questions you’ll want to ask various lenders include:

Compare offers

Finally, once you’ve gathered information from different lenders you’ll want to evaluate your options. First, take a look at the interest rates you’ve been offered. These can change from day to day, so you’ll want to choose your lender before you lock in your rate. Then compare fees. There are many fees that are incurred when applying for a mortgage. Some lenders lump them together and some charge them separately. These could include underwriting fees, application fees, and closing costs. Finally, find out if there are any programs available to you that offer assistance with your down payment. This is particularly helpful when you’re a first-time buyer.

Complete the application

Once you’ve compared offers and chosen the one that’s right for you, you’ll complete the application. As long as your financial situation doesn’t change before you close on the home, then once your application is submitted the hardest part is over.

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