Master Tips For Choosing A Lender to Buy A Home

If you’re in the market for a new home in Myrtle Beach, especially if you’re a fist-time homebuyer, there are some things you should keep in mind when choosing a lender. Friends and family who’ve gone through this process can attest to the fact that purchasing a property can be lengthy and convoluted, and choosing the right lender is one of the most effective ways to avoid headaches and hassles down the road.

Let’s go through some general tips to guide you in the right direction.

Shop Around

Lenders appraise risk differently, so odds are that while one bank will place greater emphasis on your credit score, another one will look more closely at your personal finances and income. Before making a decision based on word of mouth or popularity, shop around and compare rates from different financial institutions.

Some years back, shopping around entailed going to different bank branches and requesting a Good Faith Estimate. Now, however, you have many more options at your disposal. You can still go to a physical branch and get a Loan Estimate with expected monthly mortgage payments, closing costs, and fees, but most financial institutions now let you get Prequalified online or over the phone in as little as minutes.

Experts generally recommend you get at least three quotes from different banks or lenders, but you can request as many as you need to make a sound financial decision. The catch, however, is that applying for prequalification will entail a hard credit pull, which can lower your credit score.

The best way to go about getting multiple quotes is to do so within a 45-day period. During that window, you should only apply for the same type of debt instrument, in this case, a mortgage.

The More Options, The Better

Again, the key to getting the best possible deal is to compare all the options available to you, and that includes loan options. Doing business with a lender that offers multiple types of loans and helps you navigate through them is one of the best ways to ensure you won’t have to refinance your mortgage soon after taking it on.

There are numerous types of home loans, from fixed- and variable-rate mortgages to FHA, VA, USDA, and Jumbo loans. Your first step should be to take some time and learn the difference. There are countless online resources out there to help you get the Best Mortgage Rates, but any loan officer should be able to explain all the alternatives as well as their pros and cons.

Communication is Key

Any good bank, credit union or online lender should be able to offer you three things: options, transparency, and detailed information. If you’re lender offers little to no guidance through online tools and resources, step-by-step assistance and support, and multiple ways to reach out at any stage of the process, you may want to reconsider your options.

This tip holds true for seasoned homebuyers and new ones alike. You want to know you’ll get the help you need to navigate your home purchase, and that should come in the form of patient, expert advice. Ask as many questions as you need to and don’t be satisfied until you get a thorough, in-depth explanation that answers your question in a way you can comprehend.

Do Your Homework

This one may sound like a no-brainer, but many first-timers fail to vet their lender properly and then find themselves in a sticky situation. While determining whether a company is reputable and transparent is easier said than done, there are regulatory agencies that collect consumer complaints and actions taken against lenders.

The Nationwide Mortgage Licensing System (NMLS) and the Consumer Financial Protection Bureau (CFPB) are two such entities publishing information regarding consumer complaints and regulatory actions against companies on a national level. While the number of complaints or actions against a lender might not be enough for you to make a decision, these are good starting points for further research.

For example, if a lender has received numerous complaints regarding a specific aspect of the mortgage process, like issues with collection, you might want to look for online customer reviews to determine if there is in fact a trend and whether or not the company seems to be committed to resolving the problem.

While having many complaints or regulatory actions might not seem auspicious, it shouldn’t be a deal breaker for homeowners if the lender takes immediate action to solve these. You should also consider that larger lenders are statistically bound to receive a greater share of complaints that small community banks.

Talk to Your Inner Circle

Finally, the last piece of advice we can give you is to talk to your friends and family who’ve taken out a mortgage to learn about their experiences and choices. Your needs and situation are likely different, but it’s great to learn from the mistakes of others and get their feedback on different aspects of the process, particularly customer experience.

Today’s Guest Post by Joey Santaella of Money.com