Before You Choose A Mortgage Lender Read These Tips

Dated: 03/23/2019

Views: 642

Only You Know Which Lender Is Your Type

There are three types of mortgage lenders — retail banks, credit unions, and mortgage banks — as well as mortgage brokers, who compare loan products via a coterie of potential lenders to help you, the client, find the right one. Before you start narrowing down the candidates, you have to know what you’re looking for, and where to find it. Let’s talk about your options. 

Retail Banks

What they are: These are your Chases and Banks of America, plus your local banks. They do their own underwriting (in a nutshell, investigating your finances), so retail banks, especially the smaller ones, can sometimes offer lower fees and less-stringent credit requirements. If you like to have your accounts all in one place, you may want to use your own bank or credit union. 

Who you’ll work with: You’ll be assigned a loan officer, who will receive a commission or bonus for writing your loan.

Credit Unions

What they are: They’re not-for-profit and customer-owned, so they’re not beholden to shareholders like a bank. Because of that and their not-for-profit tax status, they typically offer more personal service and lower fees. The flip side is less convenience: They have fewer branches and ATMs. 

And to apply for a loan, you must be a member of the credit union’s community, which could be faith-, employment-, interest-, or union-based, among other things. That said, it’s typically not difficult to become a member; the National Credit Union Administration’s Credit Union Locator is a tool for finding credit unions near you. 

Who you’ll work with: As with a bank, you’ll be assigned a loan officer, who will receive a commission or bonus for writing your loan.

Mortgage Brokers 

What they are: Mortgage brokers are essentially personal home loan shoppers — they act as liaisons between home buyers and mortgage lenders to help people find the lowest rates and the best mortgage terms. They’re able to get home buyers the best mortgage rates because they leverage their existing relationships with lenders — something individual home buyers can’t do. By doing the heavy lifting for the borrower, the idea is that they make loan shopping more convenient — and perhaps a bit faster. 

Who you’ll work with: A mortgage broker can be an individual agent or a group of agents, who act as independent contractors. In exchange for their services, mortgage brokers typically charge a 1% to 2% fee of the loan amount, which is either paid by the borrower or the lender at closing.

Now that you’re armed with the basics, you’ll want to give yourself time to weigh the options about which lender, exactly, to work with.

It Pays to Shop Around Before You Commit

Over the life of the loan, seemingly subtle differences could add up to tens of thousands of dollars. That money belongs to future you and all your dream vacations, renovations, and remodeling #goals.


Image title


Want to Advertise on this Site?

Latest Blog Posts

COVID19

Check out the Center for Disease Control and the World Health Organization for more information on how to protect your family and yourself. #healthy #health #thehelpfulagent #houseexpert

Read More

JUST WASH YOUR HANDS

JUST WASH YOUR HANDS Your health and well-being of our local communities around the globe is very important. The World Health Organization (WHO) and the Centers for Disease Control and

Read More

Top 5 Home Design Trends

Top 5 Home Design Trends for a New DecadeWhether you’re planning a simple refresh or a full-scale renovation, it’s important to stay up-to-date on the latest trends in home design. Sellers who

Read More

Do You Have An Entrepreneurial Mindset What Are You Waiting On

Entrepreneur Magazine how many of these entrepreneurial characteristics you have You take action. NOW is “invent as you go.” Forget about over-analyzing and take action, she recommends.

Read More