How to Choose the Best Mortgage Lender
There are many essential steps for finding the best mortgage lender and getting pre approved for a loan. Choosing a lender for your loan is an essential step in the house purchasing process. Keep in mind that you will do business with the lender for many years. In today's article, we will tell you how to choose the best mortgage lender. Read on!
Check your credit score before starting your search
Before you start searching for a mortgage lender, make sure you check your credit score. It helps prospective mortgage lenders determine your credit value, the amount, and the interest rate. You can search for sites like Equifax to get your annual credit report, which will give you a general idea about your qualification for the loan.
Compare different types of available loans
Once you have checked your credit score and corrected errors in the report, it is time to look at the different loan options available. Remember, loans are not created equally, and you have to choose from a wide range of loans.
Each package or option comes with different limits, terms, pros and cons. Some popular loans options include fixed-rate, conventional, FHA, interest-only, adjustable-rate mortgage, and VA loans. Choose the one that best fit your needs.
Get references from trusted sources
If you are new to the mortgage borrowing process, it is a great idea to get help or recommendation from experienced buyers. They will tell you about the Do's and Don'ts involved in the mortgage lending process.
Also See: Personal Loans for People with New Jobs
Experts recommend seeking assistance from family and friends. You can also hire a financial advisor for a few days to give you the best advice. A financial advisor also has contacts with many mortgage lenders and can help you find the best one.
Compare different Lenders
Your friends, family, or financial advisor will recommend different mortgage lenders. Make a list of all the mortgage lenders and then search online to see their terms, interest rates, and other requirements.
Make an Excel spreadsheet and record all the essential items in it. It will give you a clear idea of what's better for you. Shortlist the lenders that meet your criteria and look for things, such as terms, rates, conditions, lender reputation, etc.
Choose a lender that offers the lowest interest rates and minimum down payment requirements. If you have a low credit score, then erase banks from the list and start comparing credit unions or private mortgage lenders. They are the best when it comes to getting a mortgage loan on bad credit.
Gather the necessary documents
Once you have shortlisted two to three mortgage lenders, you have to apply for the loan. However, before you do that, make sure you have gathered all the necessary documents.
You will need some relevant documents, such as a copy of the credit report, tax returns, bank statement, pay stubs, photo ID, and purchase/rent history record. Keep the documents organized in a file folder. If you apply online, make sure you have scanned images of the documents that you will need to attach along with your application.
|Thomas Moore is a proud American with a Bachelors Degree in Business Administration from the University of San Diego. He has been in the financial industry since 2007 holding numerous licenses in multiple states. He currently helps operate cashkingco.com and our resident expert on all things finance. LinkedIn Profile