Whether a first-time homebuyer or a seasoned homebuyer looking to refinance, everyone wants the best deal when it comes to their mortgage loan. The challenge of finding the best deal is not in finding a mortgage lender, but in choosing the right one. While working with online mortgage lenders is a valid way to get a loan and there are a multitude on lenders online; how do you differentiate between the less reputable ones and the lender that you can trust to work with you through the loan process? It’s imperative for you to do your due diligence up front to find the one that’s right for you.
In order to get the best deal on a mortgage, prospective homebuyers and refinancers should know what research to do up front and what to ask for. Below is a list of tips to help when it comes to working with online lenders.
Check your income. Create a comprehensive list of your income versus expenses, including the down payment, to honestly assess what you can afford.
Check your credit. Order your credit reports from all three major credit reporting agencies before you speak with a lender. This will help lenders determine what type of loans they can offer you and at what rates. Requesting your own credit reports also saves your credit score by preventing too many inquiries.
Do your homework. Compare interest rates from local lenders so that you have a working knowledge of the market and can compare it to the offer from your potential lender.
Request a good faith estimate. Keep in mind that during the early phases, quotes can be somewhat generic. These are good reference points to help narrow down your choices. Once someone pulls your credit, be sure to request a good faith estimate. This will be a formal quote and, from there, very few fees can change. Only third party/non-mortgage related things can change, such as property taxes, homeowners insurance, etc.
Read the fine print. Read all Licensing & Disclosure statements on the company’s website. These should disclose all fees related to the mortgage from that particular lender. You can also ask the lender with whom you are working to disclose all fees to you. If you are unsure whether a fee is legitimate, ask a local lender if it is reasonable.
Look for reviews. Check out feedback of different lenders online and in mortgage industry magazines. Someone may have been in a similar situation before and can offer advice from an objective standpoint.
Ask for referrals. Ask people you trust for referrals of reputable online lenders. Real estate agents, friends, family, etc., who have recently bought a home or have taken a client through the purchase of a new home are a good place to start.
Be proactive. Stay on top of the progress of your application with your lender and ask questions about the expected time-frame.
Ask questions. If you are working with a realtor, ask them if you have any questions along the way.
In summary, familiarizing yourself with the basics of finding and choosing the right mortgage loan for you will be the most useful tool when it comes to finding the most competitive rate from a trustworthy lender.
Josh Moffitt is president of Silverton Mortgage Specialists Inc. www.silvertonmortgage.com