Tips For Finding The Best Home Lenders

According to The US Census Bureau, six in 10 Americans own a home.

If you want to purchase a home, you’ll research features like the location, square footage, and layout. You should research home lenders, too.

Use these tips to find the home lender that best fits your unique needs.

How To Find The Best Home Lender

Most home loans take up to 30 years to repay, for this reason, you want to choose your home lender carefully. 

The right lender offers a variety of loan options with favorable terms that fit your financial situation. You also want to build a relationship with a professional home lender that will guide you through the application process and prioritize your best interests for the duration of the loan. 

Begin the process by asking family, friends and your Realtor for recommendations.

Know The Different Types Of Home Lenders

In today’s housing market, a variety of lenders specialize in home loans. 

Direct Lender

A bank, credit union, or community bank that offers you a mortgage loan and then services the loan until it matures is known as a direct lender. 

Here, you build a relationship with the financial institution, work with one loan officer, either in person or online, and know that your needs are truly known and understood.

Credit Union

Credit unions offer favorable loan terms, including low loan fees. A credit union also serves your local community and shares profits with its members, two added benefits of choosing this home lender source.

Mortgage Broker

As a middleman, a mortgage broker provides you with several home loan quotes from a number of different lenders. You can evaluate each offer and compare rates, then choose the right fit for you. This option eliminates hours of research.  

Mortgage Banker

Independent mortgage bankers initiate and fund your mortgage. They make their money via loan origination fees. Although your loan is often sold or passed on to another lender after you sign the paperwork, this option gives you flexibility as you choose a home lender.

Correspondent Lender

Local or online mortgage companies may approve and finance your loan but then sell it to another financial institution. Known as correspondent lenders, these companies make money via commissions paid by the institutions that purchase your loan. Using this option allows you to access numerous loan offers.

How To Compare Home Lenders

Always ask potential home lenders a few questions before you select one. 

This comparison helps you verify that you’ve chosen a reputable and experienced lender who understands your financial situation and will confidently guide you through the home loan process. 

Suggested questions include:

• What types of home loans do you offer?
• Are you licensed to do business in this state?
• What experience does your loan officer have?
• How many and what types of home loans do you process each month?
• What documentation will I need to assemble?
• Can I get a loan pre-approval?
• What are my down payment requirements?
• What is the loan’s interest rate and APR?
• What application, credit, or loan fees and related costs will I owe?
• Do you provide a loan estimate?
• How long does the loan approval process take?
• Will the loan be approved by my closing date?
• How often and in what way do you contact clients?

What Makes Some Home Lenders Better Than Others?

The greatest differentiator is personalized service.  The mortgage loan process is complex and you need someone who will hold your hand and guide you all the way through the process from application to loan closing. Here is where credit unions and other direct lenders stand out.

You want a home lender that listens and can evaluate the best products for you.  Things like the size of your down payment and your credit score will impact the types of home loans available to you. 

One home lender might be better than another due to your unique circumstances.

For example, if you have an average or slightly below-average credit score , you’ll likely make a different home lender choice than someone with a higher credit score.  For this reason you may need a home lender with a variety of mortgage loan choices like conventional, FHA, and VA loans.

The best choice you is to obtain quotes from various types of home lenders so you can compare offers. You may find that there is no difference for your particular situation, but you could end up surprised by the differences and happy you did your due diligence in getting several quotes. 

Important Factors Before Choosing A Home Lender

Always take time for a final review before you select your home lender. Compare rates, fees, experience, and customer service as you verify that you’re ready to proceed with your mortgage loan.

At Advantage Financial Federal Credit Union, our professional and experienced loan officers stand ready to explain your options and answer your questions as you prepare to purchase your next home.

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