How to Find the Right Mortgage Lender

When it comes time to buy a house, you’re almost certainly going to need a mortgage. That means you’re going to need a great mortgage lender.

Finding a mortgage lender isn’t like buying a loaf of bread. You’ll want a company that offers outstanding customer service while also giving you as a low a rate as possible based on your credit history and prevailing economic conditions.

Here’s how you can find the right mortgage lender.

Compare Overall Service

Looking for the right lender is like comparative shopping. You want to find the company that’s going to give you the best deal.

However, the best deal involves more than just the rate. You might come across a mortgage company that offers an outstanding rate, tempting you to sign on the dotted line right away. But what are the fees associated with that mortgage? How much will you pay in points?

Keep in mind also that a “no fee” mortgage might seem tempting, but that means that the fees you aren’t paying are likely baked into the rate.

Conduct Interviews

You wouldn’t let somebody manage your money without talking to that person first, would you? Then why would you allow somebody to handle your mortgage when you’ve never met the person before?

The reality is that you’re going to have mortgage questions. Be sure to sit down with the person who will be handling your mortgage and determine if he or she is the kind of person you want handling the debt related to your primary residence.

Plan for Costs the Mortgage Won’t Cover

There are far more expenses involved in home ownership than just your mortgage. You might find that your mortgage company handles the process of paying taxes and insurance for you in some cases. However, some mortgage companies might leave that job to you.

You’ll have other expenses associated with home ownership as well, such as maintenance. Be sure to factor those expenses into your monthly budget as well.

Make Sure the Lender Offers a Suitable Program

During your comparative shopping venture, you might come across a mortgage company that offers a very low rate and excellent overall service. Before you pursue that option any further, though, make sure that the company offers a program suitable to your situation.

For example, you might want an FHA loan. Unfortunately, not all mortgage companies offer FHA loans. The same holds true for USDA Rural Development loans and VA loans.

Be sure to filter out mortgage companies that don’t offer the type of program you’re looking for.

Get a Free Credit Report First

Google around to find a site where you can snag a free credit report that’s truly free (not one that offers a “free” report at first only to charge you later on). Make sure you get a good understanding of your overall credit picture.

You need to know your credit history because your mortgage company will charge you a rate based on how well you’ve “behaved” in the past. If you know your credit score up front, you’ll know if the rate you’re being offered is fair.

Although a mortgage can put a significant dent in your monthly income, keep in mind that mind that there’s a mortgage tax deduction as well. Even with that deduction, though, it’s always best to find a mortgage company that offers you the best overall deal on your home loan.