Things to Look For in a Lender

So, you are ready to purchase a home and you are looking at your financing options. A question that is probably in the forefront in your mind is – what should I look for in a mortgage lender? In today’s market, you will want to make sure you are dealing with a stable and trustworthy lender. After all, you are starting a long term association with a financial institution that you will come to rely on, and your relationship with that institution will be a determining factor in one of the most important aspects of your life: the place that you live.

The first question is, are you dealing directly with a lender, or are you going through a mortgage broker? Typically, a mortgage broker is an independent professional who works with a variety of lending sources. In this respect, they differ from a loan officer who works under the umbrella of a specific lending institution. Whether you are dealing with a broker, or directly with a loan officer, there are pros and cons to working with both professionals. Mortgage brokers get wholesale rates, so they may be able to get you a better deal from the bank, or be aware of special programs for first time home buyers that you would not otherwise have known about.

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In any case, you should not be afraid to ask questions. Do your research before making a decision on a loan.

The following are signs that you are dealing with a reputable source:

  • Can they give you a good faith estimate? The lender must provide you with a detailed list of estimated closing costs within three days of your application for a mortgage. It is advisable to request this list before choosing a loan, as different loans can vary widely in terms.
  • Are they transparent about fees, rates and points? At a customer’s request, mortgage brokers must disclose their fees in writing and in advance. Similarly, the Truth in Lending law compels lenders to be transparent about the APR of the loan.
  • In the end, just be wise and shop around first to see who will give you the best deal. Whether you are dealing with a broker or directly with a loan officer, an educated consumer is a satisfied customer.

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    Things to Look For in a Lender
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