Choosing a Lender

A very important part of purchasing a home is finding the right lender. Since interest rates can change daily, asking for the best rates is not the best way to look for a lender. Though competitive rates are important, when you consider the fact that most lenders get their money from the same sources, you must look at other factors before choosing a lender. 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.

Some questions to ask a lender:

Are they a Mortgage Banker or a Direct Lender?

Are they a Mortgage Banker or a Direct Lender?

A Direct Lender is a lender who not only originates their own loans, but also underwrites, approves, funds and may even service them. A mortgage banker has their own money to lend and the ability to broker to outside sources. This offers the most flexibility.

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.

How long has the company been in business?

Lenders come and go. Make sure that the company you are dealing with is reputable.

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

When you are quoted a rate, when will they “lock the rate” to guarantee it and how long will this rate be saved? 30 days? 60 days?