Whether you’re buying a new home or refinancing an existing one, shopping for a lender is an important (but often daunting) process. No two lenders are alike, and each can offer a prospective borrower a different assortment of loan programs. The rates and fees can vary a great deal, as can the level of service provided, so it’s important to do your research in order to make the right decision. You should look for not only a great interest rate and low closing costs, but a loan officer who communicates on your level (using minimal unfamiliar lingo); is available directly to answer your questions (not via a website or call center); and who can close the transaction on time and without hassle.
Here are some tips:
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Get referrals from your real estate broker. I have worked with many lenders over the years, and can point you in the direction of several who demonstrate integrity and consistently live up to their promises. In other parts of the country, closing late is routine. Not here... in our market, closing on time is very important!
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Talk to several trusted lenders and ask each for a loan cost estimate, which should include all of the anticipated closing costs and prorated expenses. A 15 minute call with each lender should tell you a lot about their communication style and whether it works for you. The closing costs quoted on the estimate will vary based on the loan amount and the closing date, so make sure you give each lender the same theoretical information upon which to build their quote for you. Then, you can use the estimates to compare “apples to apples” and decide which one makes the most sense for you. (I can help with the comparison if you need guidance.)
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Question fees you don’t understand. Some may be variable or even negotiable. And it's important that you understand what they mean.
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Do the math. Lower closing costs may result in an increase in the interest rate, and vice versa. The right loan for you will depend on how long you intend to stay in the mortgage and on your current cash flow needs. There’s no one right answer for everyone.
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Most importantly, a good lender will spend as much time as you need explaining everything until you are clear and feel confident moving forward. There are NO stupid questions. If you don't understand a term or acronym, ask!
Please reach out if you need some names of trusted lenders.
Happy Shopping, and don’t hesitate to call me if you have any questions along the way.
