5 Tips to Selecting a Mortgage Lender
Courtesy of Montgomery Mortgage Solutions, Inc.
Home ownership is the American Dream. Unfortunately, getting a mortgage these days can be a real nightmare. To help keep the stress of the mortgage process at a minimum, be sure to choose your lender carefully. Some offer a relatively easy process; while others do not.
All-too-often, borrowers either go to the lender they already have (or that their family uses) or they take the first offer that comes their way. Doing either can mean more work on your part and even higher interest rates and fees. So, what should you look for in a mortgage lender?
Tip I: Get To Know Who’s Lending Out Mortgage Money
First, it is important to know what types of lenders are out there.
The Traditional Bank
When you wanted a mortgage in the years past, you simply made an appointment with the loan officer at your local bank and put in an application. But, as real estate became a booming business in the 1980’s and beyond, fewer and fewer neighborhood banks could keep up with the offerings being made by larger conglomerates. This left many people searching out better deals with larger lending institutions.
Today, however, the trend seems to be leaning once again to using a mortgage banker or mortgage broker. In most cases, the rates are usually better. One thing is for sure, bigger is not necessarily better. We learned this the hard way with collapses of such Mortgage giants such as Countrywide.
Just about every mortgage borrower now at least approaches some sort of e-lender to see what they offer when shopping for a mortgage. Remember though, they these lenders are often not lenders at all, but clearinghouses or aggregators for lenders, offering them a way to entice borrowers to use their services. Obtaining a mortgage online definitely does work and is becoming more popular.
Brokers too, are not lenders at all, but a middleman that helps you find the right loan with the right lender. The benefit of using this type of broker is that he/she has access to dozens of deals offered by a multitude of different lenders. Often they do the shopping for you and their offers trump those you can get by going directly to a retail lending division of a Bank. Many of the unscrupulous or predatory brokers are gone with the new regulations that have been set forth.
Working more like a traditional bank, mortgage companies differ in the fact that they only lend mortgage monies – they do not offer car, personal or other types of loans. They focus on the business or mortgages and can often get you a better deal and service than a traditional Bank.
Tip # 2: Get To Know Their Reputation
When it comes to the mortgage business, nothing is more important these days than a good reputation. It is vital that a borrower can trust their lender.
Whether you are considering using a smaller mortgage company or a big-name mortgage lender be sure to check out their reputation by:
• checking for complaints with the Better Business Bureau in your state
• checking credentials with the Department of Banking. Most states use the National Mortgage Licensing System. You can find them at http://www.nmlsconsumeraccess.org/
• checking to see how long they have been in business
• review testimonials
If you can not find out any useful information about the lender, dig deeper, or walk away. Don’t be mesmerized by big names. Often consumers have no recourse against the giants and it can be a challenge to hold them accountable.
Tip # 3: Ask About Their Service
Obtaining a mortgage can be as simple or complicated as the lender makes it. A lender with good customer service and a competent staff can be very easy to work with. They let you know exactly what paperwork they need from you and when questions arise you can quickly find someone to give you the answers. If, however, no one ever calls you until they need something “yesterday”, or they are impossible to reach by phone or email, the entire process can be delayed; not to mention very stressful!
To determine the grade of their service, be sure to ask around. People are usually quite eager to share their experiences. Make a few phone calls and see how quickly you get a response. Most importantly, listen to your gut. Our first impressions are usually correct when it comes to dealing with any service-related industry, including the mortgage industry. If you walk away from your first encounter feeling uneasy about anything, then check out a different lender.
Tip # 4: Look for Mortgage Options
The mortgage industry offers a lot of options these days. Stay away from lenders who only force you into FHA loans or charge too many lender fees such as commitment fees and or application fees.
Tip # 5: Look at Rates and Fees
When considering any mortgage loan (and lender) be sure to look beyond their interest rate and take a good look at their fees too. Sure, a rate that is lower than the rest can save you money on your monthly payment, but if you have to pay exorbitant lending fees, upfront, those savings may not be as good as you first think.
Finding the right mortgage lender is very important to ensure that you get a good deal and have a good mortgage experience. Be sure to use the tips above to sort out the great mortgage lenders form the not-so-good ones that may approach you during your mortgage money search.
Montgomery Mortgage Solutions, Inc. is a mortgage lender you can count on to meet all of the criteria mentioned above. We hope that you will consider calling them at 908-420-3655 or you can visit www.montmtg.com
This article was provided as a courtesy of Montgomery Mortgage