You have decided to buy a house. You have made one of the most important, and one of the most expensive, decisions of your life. Naturally you want to get the best lender possible. How do you choose the best lender for your home loan, however?
According to real estate experts, one of the most important things to consider when choosing a lender for a home loan is to find one that will give you advice for free. You should never have to pay for advice when you are in the information gathering stage. If you do apply for a loan, it is customary to have to pay for an appraisal and credit report. You should never have to pay, however, for advice before that, the pre-qualification process for a home loan, or running scenarios. If someone wants to charge you for advice before you are actually ready to apply for a loan, steer clear of that lender.
A good lender will provide easy access. Does the prospective lender have a website for you to learn about the company? Does the lender have a call center that you can contact for information for advice, possibly even on the weekend, before a face to face meeting during the week?
Although that is an important consideration, you should not choose a lender for a home loan based only upon interest rates. That is because some lenders will quote a low rate to obtain your business. That lender will then supplement that rate with additional fees and charges. There is often little difference in interest rates when dealing with reputable mortgage professionals.
You should know all the fees you will be charged when you apply for a home loan with any lender. You should receive a printout of all fees. You should ask for a “Good Faith Estimate” of all the fees you will owe. If you have that information, you will be able to better evaluate the costs of the loan and compare lenders.
One consideration when choosing the best lender for a home loan is whether your interest rate can be locked in. Some lenders will allow you to lock in an interest rate at the time of the application and for a specific time thereafter. Some lenders will not allow you to do that.
Some lenders may have different requirements for home loans in different areas. Can you borrow if you want to buy in a rural area? Can you borrow if you want to buy in a mountain area?
If you hope to obtain a home loan through the Veterans Administration or the Federal Housing Administration (FHA), you should ask the lender if he has the authority to offer government-sponsored loans. Some programs of the two agencies offer loans to veterans and low income people at a low interest rate, like 3% and require little or no down payment.
The official website of the Department of Housing and Urban Development (HUD), www.hud.gov, which oversees the FHA, has a link to help you find a HUD-approved lender. The official website of the FHA is www.fha.com, and it explains FHA loans and helps you apply.
Choose someone who is able to explain the many types of home loans that are available, such as fixed or variable. That person should be able to explain to you what the best kind of a loan would be best for you and why it is the best. Be ready to explain your financial situation.
You will probably not buy many homes in your lifetime-maybe once, maybe a few times. You want to pick the best lender for your home loan. There are several considerations when choosing a lender.
