First time home buyers sitting across the desk from a real estate agent.

When you’re ready to buy a new home, looking at the real estate listings can be fun and interesting. Securing the financing and walking through the mortgage process is usually much less enjoyable and much more stressful. Knowing how to find the best mortgage lender can make the process easier to understand.

1. Evaluate Your Goals When Buying a New Home

A house purchase is not only a home for your family, but it’s a big financial investment, and like any financial move, you need to look at your long-term goals. Finding the lowest interest rate with the best loan terms is what to strive for. A difference of only 1% can be tens of thousands of dollars in interest over the life of your loan. If your goal is to make the smartest loan choice, you’ll know how to focus your research.

2. Decide Which Type of Lender is Best for You

Credit unions often offer better rates but have limited options. An online lender offers convenience and lower fees, but they lack the in-person customer service. A big bank who offers a large array of options, but a less personal approach? A local bank who may be able to move quickly, but limited tools? Borrowers have more options than ever, and it’s important to research all the possibilities when you’re starting the process.

3. Ask Friends and Family for Recommendations on How to Find the Best Mortgage Lender

Talking to those who have recently gone through the process is a good way to get an inside look. When choosing which friends or family to ask for advice, consider those in a similar situation to you. Ask what the service was like, how they were treated, the length of time, and any hiccups along the way. You need to find a lender you can trust, and word of mouth is still a great way to know who that may be.

4. Be Careful of “Too Good to Be True” Situations

Advertising can be deceptive. Most of us know this and understand that if it looks too good to be true, it probably is. Still, it can be tempting to look at a sign boasting interest rates “as low as” and feel like that’s the best choice. Typically, those rates are intended to just get you in the door and started on the paperwork, and then you may feel stuck when the rate you actually qualify for isn’t nearly as good. Read the fine print and shop around before being drawn to great marketing.

5. Consider Using a Mortgage Broker

A mortgage broker is an intermediary between the borrower and lender. A broker will look at your financial situation and determine the right loan type, then submit your application to lenders who are right for you. You will pay a fee for using a mortgage broker, but using their expertise can make the process much easier and their knowledge can get you a better deal.

6. Vet All Your Potential Lenders and Brokers

You need to do your homework and scrutinize the reputation and qualifications of all the lenders and brokers you’re considering. Make sure your lender is licensed and in good standing and check your broker’s reputation against the National Association of Mortgage Brokers. Check with the Better Business Bureau to look at any complaints and how they were handled.

7. Be Ready to Negotiate

When it’s time to apply for your loan and lock in your rate, make sure you’ve chosen a lender or broker you are able to negotiate with. Do your homework, be ready to leverage competitors’ rates, and ask for the best loan terms. When dealing with a home loan, even a fraction of a percent can save thousands over the life of the loan. The more prepared you are, the more research you’ve done, and the more comfortable you are with your knowledge will help you secure the right lender. We can help you find the right lender. Contact us today to talk about your homeownership goals with a local real estate agent.