Unless you can pay for a new home in cash, choosing the right mortgage company is going to be the best way to get a home loan. There are many mortgage companies out there to choose from which makes choosing between them an overwhelming decision. All mortgage companies are not the same and there are some that are better choices than others. That’s why knowing how to choose the right one for you is so important. Here are some considerations and suggestions to keep in mind when trying to choose the right mortgage company to meet your home buying needs.
Mortgage brokers may seem like the best bargain, but they can mean more trouble. Mortgage brokers are less stable than mortgage banks or lenders because they do not necessarily have to be licensed and they do not have to go by the same rules and regulations that lenders and banks must adhere to. Mortgage brokers are essentially “middlemen” between you and the bank. The service they provide is basically looking through various mortgages and finding the ones that best meet your budget. You can do that yourself and save the brokerage fees! A mortgage broker can, however, make the entire process easier on you.
If you do decide to use a mortgage broker, you should always shop around and ask for references. Be aware of any hidden charges that my pop up while they are working on getting your mortgage. Always read the fine print, too. It may sound cliché, but reading the fine print will help prevent unexpected costs or problems in the future.
The bulk of mortgage loans are extended by banks and actual mortgage companies. These institutions operate similarly when it comes to mortgages and many homebuyers prefer going through a mortgage lender or bank because they are more stable than other methods of getting a home loan. Banks and lenders are regulated by the federal government and they are closely monitored to ensure that they are following the regulations they are supposed to be following.
Before deciding on the mortgage lender, find out what rates they charge. If you already have a bank where you do business, you may be eligible for a lower mortgage rate from that bank which could save you thousands of dollars over the term of the loan. One of the only drawbacks to using a mortgage lender or a bank for your home loan is that they typically do not over the same options that brokers offer and may have stricter lending guidelines.
There may be instances in which you could benefit from getting a mortgage from the company that built your home. Much like mortgage brokers, homebuilders act as a middleman between you and the mortgage company and they are motivated to helping you find the mortgage that is right for you so they can sell the home they have just built. If you decide to go with a homebuilder to get your mortgage, make sure the company has been around and has a great reputation before making the agreement. You should also familiarize yourself with the costs they will charge you for their services so there are no surprises when it comes time to pay the bill.
What to Avoid
When choosing the right mortgage lender, there are a number of things that you should avoid. Always go with a lender that has a branch in your state so they are familiar with the rules and regulations concerning mortgages in your area. Sometimes questions arise after business hours and on weekends and you need to know the answers right away. Make sure you have an after-hours number for your lender. Your loan officer should always be available to answer your questions even if it is a weekend or after business hours.
You should also check with the Better Business Bureau before signing up for a mortgage with any lender. According to the BBB, the mortgage industry receives more complaints than any other industry and it could be helpful to know what other customers are saying about various companies so you can make a more informed decision. Finally, choose a mortgage lender yourself. Many times, your realtor will try to talk you into using a company they work with, but your agent may be getting a commission based on their referral.
The important thing to remember when choosing your mortgage lender is to do your research. Most home mortgages last for 30 years, so you want to be sure your relationship with your lender is going to be one that you can enjoy.