Choosing A Lender

When choosing a lender competitive rates are important, but when you consider that most lenders get their money from the same sources (and therefore have essentially the same rates to offer) you must look at some other factors.  You need a lender who works with you and your real estate agent as a team and has the same goal – to get your loan closed in a timely and professional manner.

Build a list of lenders

Talk to people you know who have bought or refinanced a home recently.  Check online as well as the newspaper’s real estate or business section.  Your real estate agent would be a good source as well since they have probably worked with several lenders and might have a strong working relationship with some.

Talk to a loan officer

Call or visit the lenders on your list.  Get a feel for what it will be like to work with them, and how they approach your needs.  If you’re still uncertain, ask for references – recent home buyers like yourself – and talk to them.

Compare rates for similar loans

Among the things you’ll want to discuss with prospective lenders are the rates they offer on mortgages.  When comparing rates between lenders, be sure the rates are for comparable loans and remember to include fees and other costs so you’re really comparing apples to apples.

Questions to Ask a Lender

Are they a mortgage banker/direct lender?

A mortgage banker is a lender who not only originates their own loans, but also underwrites, approves, funds, and services them.  A mortgage banker has their own money to lend and therefore has the most control over the loan.

Are they a mortgage broker?

A mortgage broker originates loans but does not actually lend the money.  The broker will submit the package to an outside source that underwrites and funds the loan.  A mortgage broker may offer the best opportunity to get your loan approved since they can send the loan to many different lenders.  They also offer a wide variety of loan programs.

How long has the company been in business?

Lenders come and go.  Make sure that the company you are dealing with has been around a while.

What is their reputation within the real estate community?

Do they lock in their interest rates and for how long?