When looking to buy a home whether it’s your first, second, rental investment property, or vacation home. Choosing the right lender is the single most critical decision in your transaction. Why? Unless you are planning to pay cash outright, you will need to secure a loan from a lender to make the purchase possible. When buyers shop for lenders, they typically focus on who’s got the best rates and lowest fees. There are many more important items that buyers should take into consideration as choosing the right lender can be the difference between a smooth transaction or a rough and bumpy transaction.
There are many lender choices to pick from: large national banks, regional banks, smaller local banks, local credit unions, direct mortgage lenders, and mortgage brokers. Each type of lender offers its unique pros and cons. Each type of lender may offer its own special loan programs, grants, or closing cost assistance. Generally, banks and credit unions tend to have tighter borrower requirements vs a direct mortgage lender. So if you’re credit is less than stellar, you may want to try contacting a direct mortgage lender. From a customer service standpoint: communication, accuracy, and speed are of the utmost importance. As a buyer, you want to have the best lender on your team to make sure that they can close on your home quickly and provide you with constant updates on each step of the process without you having to chase them down for updates. In addition, local lenders have a better understanding of the local real estate market and values, this can be critical for things like appraisals. While mortgage brokers may be able to provide you with the lowest interest rates, their communication and speed may be slower as they act as the middle man between the lender and buyer. When you’re shopping for a lender, keep these items in the back of your mind.
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