It probably takes weeks or even months to select your dream home.
Choosing a lender will take much less time, but should be handled carefully as well. There is a difference between mortgage brokers and lending companies: A mortgage broker interacts between the consumer and a lender & may offer services for different lenders. A mortgage lender is a financial company that provides a loan directly to you. A broker many times charges an upfront fee for services provided. Therefore always ask about the fee structure!
If you are buying a home or refinancing, keep following tips in mind when you shop for a mortgage lender:
- Try to learn about the different types of mortgages out there, such as a 30 year or a 15 year fixed rate, adjustable rate mortgage (ARM), balloon, etc. So when you discuss options with the mortgage lender, you will be more likely to pick the best deal!
- Get quotes from several lending institutions or mortgage brokers before choosing one. Get referrals from your friends, family members, realtor who have recently bought (new) homes. Besides that you might want to check the Yellow Pages, newspapers or web search engines.
- Ask for an itemization of closing charges from each mortgage lender before submitting an application form. Inquire about costs on one mortgage lender's list that are not on others (this may prevent undisclosed costs from surprising you at settlement).
- Choose a mortgage lender who is willing to answer all your questions. Expect the lender to ask questions. Your replies can give important signals about the best mortgage program to suggest.
- Be aware of predatory lending practices like steering customers towards higher interest rates, charging unnecessary fees or adding points without reducing the interest rate of the loan. If you think that you are a target, ask an official at a non-profit agency or legal-aid organization to have a look at the proposed mortgage offer free of charge!
LendAdvisors.com - Blog that helps you with Real Estate, Mortgages & Refinance.
