How to Shop for a Mortgage Lender: A Guide for Home Buyers!
Before you start touring homes, one of the most important steps is choosing the right mortgage lender. The lender you select will impact your loan terms, interest rate, and overall home-buying experience. Carriage Realty agents can connect you with trusted lenders to help you compare your options and make an informed decision.
Understand Your Lender Options
Different types of lenders offer various benefits. Knowing the differences can help you choose the best fit for your needs:
- Mortgage Bankers: These are banks or financial institutions that offer loans directly. They typically have in-house loan programs and can be convenient if you already bank with them.
- Credit Unions: If you qualify for membership, credit unions often provide lower rates and fees, along with more personalized service.
- Mortgage Brokers: Brokers don’t lend money directly but instead shop multiple lenders on your behalf to find competitive rates and programs. They may help you find niche loan options.
💡 Our experienced agents have relationships with top local lenders and can provide amazing referrals to assist you in shopping for the best loan options.
Compare Pricing & Costs
Lenders make money in different ways, so it’s important to compare:
- Interest Rates: Even a small difference in rates can save or cost you thousands over time. Ask for rate quotes on the same type of loan (e.g., a 30-year fixed mortgage).
- Fees & Closing Costs: Lenders charge origination fees, processing fees, and other costs. Request a Loan Estimate from multiple lenders to compare.
- Discount Points: Some lenders let you buy points upfront to lower your interest rate. Calculate if this is beneficial for your situation.
Look at Loan Programs & Special Offers
Depending on your financial situation, some loan types may work better for you than others:
- Conventional Loans: Best for borrowers with good credit and a solid down payment.
- FHA Loans: Ideal for first-time homebuyers with lower credit scores and a smaller down payment (as low as 3.5%).
- First-Time Homebuyer Programs: Some lenders offer grants or down payment assistance programs, which can help reduce upfront costs.
- Local City Down Payment Assistance: Many cities offer down payment assistance programs to help first-time buyers or those with moderate incomes. These can include grants, forgivable loans, or low-interest second mortgages to help cover down payment and closing costs. For example, check out the City of Shoreview and Woodbury’s programs! Carriage Realty agents can connect you with lenders who specialize in these programs and help you determine if you qualify!
- VA or USDA Loans: If you’re a veteran or buying in a rural area, these loans offer great terms with little to no down payment.
Compare Customer Service & Reputation
A good lender should offer not just competitive rates but also strong support throughout the process.
- Read Reviews: Look at Google, Yelp, and Better Business Bureau ratings
- Check Responsiveness: Test how quickly they answer emails or calls
- Ask for Recommendations: Carriage Realty agents can connect you with lenders known for excellent service and smooth closings.
Get Pre-Approved Before Viewing Homes
Getting pre-approved is a critical step before you start house hunting. This helps you:
- Know exactly how much you can afford
- Show sellers you are a serious buyer
- Speed up the home-buying process once you make an offer
BONUS! Carriage Realty Can Help You Sell & Buy!
If you need to sell your current home, our team can meet with you for a private home-selling consultation to help you achieve your home-selling and buying goals. We’ll provide a market analysis, discuss pricing strategies, and ensure you are in the best financial position for your next home purchase.
By comparing lenders and securing the right loan upfront, you’ll be in a strong position when you find your dream home! 🚀🏡
*Crafted by Chapgpt and tweaked by Karen Stang, Carriage Realty!
