The 5 Best Ways to Shop for Mortgage Loans

Mortgage Loan Application

If you had to find a good mortgage lender by the end of the week would you know how to do it? Most of us are pretty familiar with the mortgage loan process, but there are a lot of lenders out there and finding the good ones is not always so easy. If you have to shop for a mortgage loan here are some ways to help you find a good lender.

1. Shop your own bank.

This is the best place to start your search for a mortgage loan. A bank that you have been working with for a number of years knows you and has access to information that will make the application process much easier than if you went to a lender who you’ve never dealt with in the past.

Because you are familiar with the bank, you will also feel more comfortable working with them. The mortgage process is long and very involved and working with a lender who knows you will help to smooth out some of the rough spots that are likely to happen at some point in the process.

2. Find prominent local lenders.

If you can’t work something out with your own bank, the next place to look is with other mortgage lenders who are prominent in your community. Lenders build up reputations, and if a lender is involved in much of the mortgage work in your area there’s probably a good reason. The lender is delivering the service that borrowers and local real estate professionals have come to expect.

Even if you yourself have not been active in the mortgage market in some time you probably know who the prominent lenders are. You hear their ads often on radio or TV, or see them in the print media. You may also hear their names coming up on a regular basis with friends, coworkers, family members and even real estate agents. If the company has been prominent in the area for a few years they’re probably doing something right.

3. Get referrals from trusted sources.

Look for referrals within your own social circle. This can include extended family members, friends, coworkers or people you do business with. It’s likely that several people who you know will have worked with a mortgage lender within the past year or two.

Ask them what lenders they worked with, what their experience was and if they would work with them again. If most of what they say is positive then that lender should be on your short list of companies to work with.

Don’t dismiss a lender just because the friend has a complaint or two. Because of all of the complications involved in getting a mortgage there will usually be one or two issues that came up during the application process. This may have been more of a glitch than a real problem. Decide for yourself if the problem they report was really something major, or merely something that made them feel uncomfortable.

4. See who your realtor recommends.

Real estate agents works with mortgage lenders all the time. They will have a solid idea of who the most reliable mortgage lenders are and are an excellent source for referrals if you are buying a home.

An important consideration here is that a real estate agent needs a good mortgage lender in order to make a living. The agent will not work with lenders who either make the process unnecessarily difficult or have a high likelihood of declining loans. This means that a real estate agent has more than a passing interest in who the better lenders are. Their opinions carry a lot of weight.

Even if you’re only looking for a lender to refinance your home, it would be well worth your time to get the opinion of a real estate agent.

5. Visit mortgage websites.

I put this category last and there’s a reason for it. There are a number of excellent mortgage websites on the Internet but they are mostly listings of large numbers of lenders along with their programs and pricing. They are good places to go if you’re looking to get the lowest rate possible, but rate will tell you nothing about a company’s reputation and quality.

Mortgage websites are well worth visiting if you’ve already narrowed down the list of lenders you would like to work with. The sites will show their current rates and program offerings, and you can compare those to what other companies on your list have. The better sites also offer tools such as mortgage calculators that will enable you to consider different loan amounts and pricing.

Some of the more popular sites that can help get you started include Bankrate.com, LendingTree.com or HSH.com.

Whatever you do though, never choose a mortgage lender based solely on rate. The lender with the best rate may not be able to deliver a closed loan for you. They may also be so busy that they can’t close your loan. Look for lenders who have a reputation of being able to deliver what they promise, and choose the one among them that has the best rate.

That may not be the best rate on the market, but it will be one that you can bank on at the closing table.

How did you find the lender for your mortgage and how did it work out for you?

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5 Comments
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  1. How about a rental property loan, any one got a reference for a lender?

  2. #3 is how I like to do it. We are refinancing through a lender that is doing a co-workers loan as well. I found out from him how low the rate was and that the lender will cover the closing costs. I didn’t even know that was possible until I asked someone I trusted and they gave me the scoop!

  3. From my own experience, your third point – referrals – is especially important. When we bought our first home, we were referred from a trusted source to an experienced mortgage broker who is a strong Christian. She did a great job, so we went back to her when we refinanced and again when we bought a new home 5 years later. Just recently we moved to a new state and bought a home with her assistance. That personal relationship made a huge difference. She helped us navigate many twists and turns in our latest home-buying process, was always quick to return calls, and patiently answered our many questions. It was important that the rate she could provide was in line with national averages, but that personal relationship really made a difference.

  4. We got our mortgage through a referral and were very happy with the service, but that mortgage has now been sold three times until we now find ourselves with a large corporation that’s in the process of filing for bankrupcy.
    I would like to refinance and wonder about USAA (for veterans and active-duty), but I don’t know anyone who is using them. We get many offers in the mail but I don’t trust them. So we do nothing and months have gone by and we’re still with the faceless corporation and wondering what will become of our mortgage next.
    How does one go about finding a Christian mortgage broker?

  5. Great article regarding the mortgage loan. Indeed, selecting the right lender for the mortgage loan we have is the best way, because not all the methods or lender are best for you. As a student, utilizing separate money-saving vehicles, one plan offers a 5 percent break on income-based repayments, called “Pay As You Earn;” while the second plan offers a modest interest rate decrease on two or more federal loans that have been consolidated. With Obama’s loan modification plan you do not need to be behind on your mortgage to qualify. However, it is critical that you demonstrate that due to a financial hardship you will not be able to continue making your payments and that it is in the lender and your best interest to receive a modification.

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