If you’re buying your first house, you may not understand the importance of comparison shopping. What’s more, you may think any mortgage company is qualified to take care of your needs. However, just because there’s a bank on every corner and mortgage companies create loans every day doesn’t mean you should choose a random company to work with.
Buying a house is a major transaction. So before you establish a long-term relationship with a bank, make sure you choose the right mortgage company.
1. What’s your preference?
Determine what you’re looking for in a mortgage company. Some people prefer personable service, and they need to see and shake hands with their loan officer. If this sounds like you, you’ll probably do better working with a local mortgage company where you can develop a relationship with your loan officer. On the other hand, if you’re only interested in getting the lowest rate, and you don’t need to physically see your loan officer, there’s the option of getting a home loan from an online-only mortgage company, which typically offers the best rates.
2. What’s the company’s reputation
Not every bank or mortgage company has a good reputation in the community. If you’re looking for a hassle-free experience, plus a mortgage company that’s honest, knowledgeable, and reliable, look online for actual customer reviews or contact your local Better Business Bureau and check for unresolved complaints.
Understand, however, that every bank or mortgage company will have a percentage of unhappy customers—it’s unavoidable. However, if you find that the majority of customer reviews for a particular mortgage company aren’t favorable, look elsewhere.
3. Get trusted recommendations
The reviews you’ll find online are written by people you don’t know, so you can only put so much trust in their opinions. For a more accurate picture of how a mortgage company conducts business, get recommendations from those in your circle who’ve purchased or refinanced a mortgage. Additionally, your realtor might have a few connections or recommendations to offer.
4. Types of lending products
Choose a mortgage company that offers the lending products you need. For example, if you have a lower credit score or need a specialized program, such as an FHA or VA home loan, ask whether a mortgage company offers these products before completing a mortgage application and authorizing a credit check.
Some mortgage companies are smaller and don’t offer a variety of home loan products, whereas larger companies might offer an abundance of products to accommodate different types of borrowers, such as first-time home buyers and buyers who need down payment assistance.
5. Check mortgage rates
If you find two or three reputable mortgage companies, but can’t decide which company to choose, it all boils down to interest rates.
Request a free, no-obligation mortgage quote from multiple lenders and compare terms like interest rates and closing costs to decide the most affordable option. The bank will check your credit to accurately estimate your interest rate — but don’t worry about damaging your credit. Fortunately, multiple inquiries don’t hurt your credit score when applying for a loan as long as these occur within a 45-day window. In this instance, credit scoring models recognize that your rate shopping and any multiple inquiries only count as one inquiry.
Finding a quality lender can be tricky, but possible. Just make sure you don’t pick a lender at random, and always read customer reviews or request recommendations from those you trust.
Filed Under: Borrower Tips, Commentary, First Time Home Buyer, General, Mortgage Broker/Banker
Tagged with: choosing a mortgage company, Connecticut mortgage company, how to choose a lender, mortgage company, mortgage lender, picking the right lender