How to Find the Best Mortgage Lenders

Ask these questions to find the best home loan provider for you.

Whether you’re moving to a new home or buying a home for the first time, make sure you’re working with a mortgage lender who will find the best mortgage rates, take steps to make sure you’ll close on time, and provide you with guidance and support during the process.

The best mortgage lenders for first-time buyers take the time to disclose mortgage fees, help you find the best deals and explain how the loan process works. Use these tips to find the best mortgage lenders.

Know the Difference: Mortgage Lenders vs. Mortgage Brokers

A mortgage lender represents the actual financial institution that loans you the money to buy your home. A lender might work out of a bank or purchase applications from a broker.

Mortgage brokers match borrowers with lenders. A broker screens you to determine which mortgage banker or lender will be able to service your needs best. Once you start working with that lender, the broker is no longer part of the transaction.

Correspondent lenders take on the dual role of mortgage broker and mortgage lender. Unlike mortgage brokers, correspondent lenders fund the loans with their own borrowed money instead of through a bank or other financial institution.

Learn: Step-by-Step Guide for First-Time Homebuyers

Interview Mortgage Lenders

When shopping around for the best mortgage, it’s a good idea to meet with more than one lender. Finding one you can establish a personal connection with can make it easier for you to communicate with them.

You should speak to at least two, but no more than three lenders, said Whitney Fite, president of Angel Oak Home Loans in Atlanta. This way, you’ll have a chance to build rapport and find out with whom you’ll likely have the best relationship, said Fite.

When you meet with a lender, you should know your credit score and if there are any errors on your credit report, said Kevin Quinn, senior vice president of retail lending at First Internet Bank. It’s also a good idea to know how much you can afford for the home and how much of a down payment you can make so the lender can give you personalized recommendations, said Quinn. You should be able to get more accurate mortgage rate quotes this way and get a better idea of whether you should go with a fixed interest rate or an adjustable-rate mortgage.

Ask Mortgage Lenders Key Questions

Because a home loan can be complicated, you need someone who is going to walk you through the process. “For first-time homebuyers, it’s extremely important to work with a loan officer that is responsive, patient and knowledgeable,” said Fite. “The home buying process has a lot of moving parts and can be intimidating, making it imperative that [first-time homebuyers] work with someone who can help them navigate the process.”

Ask these six key questions during a lender interview:

  • How long have you been in this business?
  • How long have you worked for the bank?
  • How often do you work with first-time homebuyers?
  • What can I expect from you through this process?
  • Does your company underwrite loans in-house?
  • Do you have any type of customer service guarantee?

You might be seeking information on details like mortgage points, the best deals on fixed and adjustable interest rates, or your bargaining power, for example. A good mortgage lender can answer these questions related to buying a house.

Find Out: How Long Does It Take to Buy a House?

Beware Mortgage Lender Red Flags

If you want to find a mortgage lender who will get you the best mortgage rates possible, be mindful of red flags that indicate the lender might not have your best interests in mind, such as not getting back to you in a timely manner. “Buyers deserve timely responses to any and all inquiries or questions,” said Fite.

Be ready to spot these four red flags that signal a lender might not be a good match:

  • A one-size-fits-all approach: “Prospective homebuyers should first do their research and ensure the lender will provide a high level of service while working to find the best possible configuration of rates and fees to meet their individual needs,” said Quinn.
  • Aggressive sales tactics: The best lender will go out of his way to serve as an advisor and won’t be too pushy. If you feel like you have no bargaining power and the lender is just selling to you, it might be best to walk away.
  • Unwillingness to put anything in writing: Your loan will eventually serve as a sales contract, so you need to make sure any agreements are in writing.
  • Poor communication: A lack of responsiveness from a lender is not a good sign; you should get timely responses to all of your inquiries.

Make an Informed Choice When Choosing a Lender

When you decide to buy a house, it pays to do your homework before you choose a mortgage lender and decide on where to get a mortgage loan. Take the time to shop around and find a lender you feel is trustworthy and reliable and who is the best mortgage lender for you. Consider the best mortgage companies and work with a lender who will take the time to learn about your situation, explore several options, and personalize the experience to accommodate your budget and preferences.

Keep Reading: How Much the Homebuying Process Really Costs