Choosing a Home Loan

Who do I talk to, to get a home loan?

Important Factors to consider when picking a Home Loan

• The terms of the home loan are crucial. What is the interest rate they are charging? Is it a fixed, adjustable or arm loan? What is the loan origination cost (additional fees you will have to pay)? What are the total lending costs, (this depends on your credit score and down payment amount)? Thankfully, the home loan industry is pretty heavily regulated right now and so the information you get from a local lender should be pretty clear and relatively easy to understand.

• What kind of loan service will you get? This is the hard part for a potential home buyer to figure out. This is why most home buyers will ask their local real estate agent for a recommendation. A bank could offer you amazing terms (see item 1) but then fail to close your loan on time or even at all! Many home loan lenders don’t do enough work upfront to make sure that the home buyer can get the loan and then after the home buyer has paid for the inspection and appraisal and is almost ready to close, will reject their loan application due to something they found in what is called “underwriting.” So a bad home lender can really cost you money, a home loan lender that looked like they they were going to save you all kinds of money, could end up costing you more than you might imagine. This is why I would encourage you to "interview" a couple different lenders, I can always give you a couple of trustworthy lenders information for you to talk with.
  

Start shopping a home loan with your local bank.

• Why not? You already bank there. It will give you a base line for mortgage rates and terms. However, please do not end there. Most of the time you can find a better loan offer and better loan servicing through a local mortgage lender in town. You would be doing yourself a disservice to only shop at one location for a home loan. 

Next get a quote from a local mortgage lender.

• Ask your real estate agent for a top local lender that they trust and have worked with. These providers can either qualify you online, or you can set up an appointment with them at their office to get a quote. Often they will have the best rates available and they will have more loans to choose from, but it is almost certain that you will get the best home loan service, and have a great purchasing experience.

Look at online mortgage lenders, but be careful!

• Online mortgage lenders might have some of the best-looking deals out there and they look great at first but turn out to not be so great when you read the fine print. Also, they are the highest risk (in my opinion) of messing up your home purchase process, by not closing on time or failing to even fund the loan. Home buyer beware.