Want to know how to find a mortgage lender? You’ll learn about that in this post, as well as questions to ask your mortgage lender, types of mortgage lenders, and where to get a mortgage.
In the past, it has been difficult to answer the question of where to find a mortgage lender. You can get personal referrals to great lenders and use other methods to learn about potential candidates, but now there is a better way.
Getting a mortgage can be a confusing process. It makes sense that you want to work with a lender you know and trust. But how do you go about finding one?
Before we go into the post, I’ll discuss some quick ways to find a mortgage lender.
Ask friends and family for recommendations. If you already have a relationship with one of your friends or family members, ask them if they’ve ever used their lender for home financing. If they have, ask them what they liked or disliked about their experience.
If they haven’t, ask if they’d be comfortable giving you the name of their current lender so you can contact them in the future.
Look up mortgage lenders online. You can find mortgage lenders online by looking in your local yellow pages, searching online directories such as Google, Yahoo!, and Bing, and visiting their websites.
Related: How Long Does a Mortgage Preapproval Last?
Ask your real estate agent for a recommendation. Your real estate agent has experienced the home financing process firsthand, so he or she will likely be familiar with many local lending companies. He or she may even have a preferred lender that he or she uses regularly or knows is reputable and trustworthy.
Check out lenders at your bank. Many banks offer mortgages through their own lending departments or through affiliated mortgage banking firms. Because these lenders are usually fairly well-known in the local community.
These are some quick ways on how to find a mortgage lender.
Where to Get a Mortgage
Where do you start if you’re looking for a mortgage?
Your best bet is to start with an online broker. The major brokers will have access to all the lenders out there, and they will be able to match you with a lender that has the best deal for you. It’s also easier to compare loan products when you can see them all on one page of a website.
The best way to find a broker is to ask friends and family members who have recently gone through the process for recommendations. Your local real estate agent might also be able to give you some leads.
If you’re looking for a broker, check out the National Association of Mortgage Brokers or the Better Business Bureau website for information on finding a reputable broker in your area.
Once you’ve found a broker, they should be able to tell you what requirements are needed before they can get you pre-approved for a loan.
They’ll gather information about your income and assets, and once they have that information they can determine whether or not you qualify for different types of loans.
They can also help with the paperwork that’s involved in getting approved for a loan, and they’ll walk you through the process so it doesn’t seem so intimidating.
Another good place where you can get a mortgage is a credit union, though you’ll need to be a member to enjoy the full benefits.
Credit Unions issue more than half of all mortgage loans in the U.S. It’s a convenient and popular method to obtain mortgages.
You could also check out mortgage marketplaces.
Finding a mortgage lender can be a daunting task for anyone looking to buy a new home. Many lenders have similar rates and fees, and it’s difficult to tell which one is the most reliable.
The mortgage marketplace can help you make sense of your options and get the best mortgage available to suit your needs.
Types of Mortgage Lenders
A mortgage lender is a financial institution that makes it possible for people to purchase property with a mortgage loan. The majority of mortgage lenders provide home loans to individuals who want to buy a home or refinance their current mortgage.
Trying to find a mortgage lender can be confusing, especially if you are just starting out in the process of buying your first home. There are many different kinds of mortgage lenders and even more kinds of services that they offer. This can make finding the right lender difficult.
There are many different types of mortgage lenders. The following are a few of the most common types:
Fannie Mae & Freddie Mac
These government-sponsored enterprises (GSEs) make up two-thirds of the U.S. mortgage market.
Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) purchase mortgages from banks, savings and loan associations, and other lenders and repackage them into securities for sale to investors.
Tallie Mae
A GSE, purchases loans from banks or other lenders, including some subprime loans that Fannie Mae and Freddie Mac won’t touch.
It then sells bonds to investors backed by the payments made by borrowers on those loans.
Community Development Financial Institutions (CDFIs)
Nonprofit organizations that work with local financial institutions to provide financing to low-income individuals, or community development projects in economically disadvantaged areas.
Department of Veterans Affairs (VA)
The VA encourages veterans to become homeowners by offering guaranteed home loans with competitive interest rates and flexible loan terms, such as down payment assistance and principal reduction program options.
Credit Unions
Credit unions are nonprofit cooperatives that focus on lending to people in a specific community or economic sector, such as teachers.
What Kinds of Mortgage Lenders Exist?
There are two main types of mortgage lenders: brokers and banks. Brokers are not affiliated with anyone lending company and will shop around for the best deal for you. Bank-affiliated lenders, on the other hand, work exclusively with one particular bank or group of banks.
Some brokers only work with one bank while others may have access to all different types of banks. The advantage of using a broker is that he can shop around for you and negotiate with several different banks so that you get the best possible deal.
Most brokers do this as a service, but some charge a fee for their time on top of whatever interest rate they are able to get you.
What to Look Out For in a Mortgage Lender
Getting a mortgage isn’t always easy. The process is long, and there are many people involved.
There is the mortgage lender, the broker who arranges your loan, and a lawyer who advises you. Trying to sort through all of these people can be tricky.
It’s important to find the best mortgage lender for you. Here are some things to look out for:
- An easy application process. You should be able to apply online in 10 minutes or less. If that’s not possible, look elsewhere.
- A good lender will keep you updated on your application and status throughout the loan process, so you know where you stand at all times.
- A good mortgage lender will keep in touch with you during the entire process of getting a loan so that you fully understand what is happening and what needs to happen next.
- Friendly customer service staff. Your lender will be your go-to person throughout the mortgage process, so you need someone who’s easy to communicate with and willing to answer your questions.
- Reasonable fees. You don’t want to pay extra fees for services you don’t need. Shop around!
- Local support. You’ll probably have questions after closing, so make sure your lender has local experts who can guide you through the process and address any problems that come up afterward.
- Expertise. Your lender should be well-versed in your area’s housing market and property values, as well as loan programs available in your state.
If you feel like something is not going right or that something seems off, it’s okay to contact your lender to see what can be done about it.
How to Find a Mortgage Lender
You can find mortgage lenders in a variety of ways, from your existing bank to local branches of national banks, as well as on the Internet. The first step is to make a list of the lending institutions you currently do business with. Then you’ll want to call each one and ask if they offer any mortgages.
If they don’t, ask if they can refer you to a lender who does. Some lenders will give you a referral fee for sending them business. If that’s the case, make a note of this so you can call back later to get your referral fee from that lender.
When speaking with potential lenders, ask them if they are willing to work with you even if you have poor credit or have been turned down for a mortgage in the past. This may not be their policy, but it never hurts to ask!
Also, discuss possible fees and how long it will take to receive your loan once an application has been submitted. You’ll want all these details worked out before beginning your home search process.
To find the right lender for you, you’ll need to do some homework. You may want to start your research by searching online for local mortgage lenders. There are many websites that offer lists of lenders and can even help you fill out applications for loans.
You’ll also want to check with your friends and family members for recommendations. If you know anyone who’s recently purchased a home or refinanced, ask him or her about their experience working with a lender and how that lender treated them.
Another option is to check with your local real estate agents and brokers. They’re in contact with lenders on a regular basis and might be able to refer you to someone they trust and recommend.
When meeting with a mortgage agent or broker, be sure to ask specifically which lenders they recommend, so you’re not wasting your time applying for loans from companies that won’t work with you.
What Kind of Mortgage Am I Eligible for?
That’s a question many people ask when they start shopping for a home. There are so many mortgage options — fixed-rate, variable-rate, balloon payments, interest-only, adjustable-rate — and the terminology can get confusing.
The easiest way to find out which mortgages you’re eligible for is to work with your real estate agent or lender. They’ll be able to help you find a loan that best matches your needs and your budget. But if you want to research available mortgages on your own, here are the main types of mortgages:
- Fixed-rate mortgages. These are probably the most common type of mortgage and tend to offer the lowest rates. The rate remains fixed throughout the term of the loan — usually 10, 15, or 30 years. There are also zero-point loans that offer even lower rates but require private mortgage insurance as part of the payment plan.
- Variable-rate mortgages. These used to be quite rare but have become more popular in recent years as interest rates have fallen sharply. The rate changes every month or two in response to market conditions but generally starts out lower than a fixed-rate loan.
Questions to Ask Your Mortgage Lender
You’ve found a mortgage lender, and now it’s time to take some important questions.
Your goal is to find the best loan for you so you can buy your dream home as quickly as possible. Here’s what to ask, and what to look out for, when working with a mortgage lender:
- How long have you been in business?
- What percent of your loans result in a default?
- What are your plans for the future?
- How much money do you make from originating loans?
- Do you charge origination fees? If so, how much and why? Are they negotiable?
- Are there any extra fees I should be aware of?
- Can you help me understand my closing costs and my monthly payment? Are they negotiable?
- What types of mortgages do you offer? Can I get other types if I need them?
- What is your process for approving loans? When will it start and when will it end?
- How long have you been at this location/with this company?
Final Thoughts: How to Find a Mortgage Lender
In the end, knowing how to find a mortgage lender is easier than it used to be—and that’s a good thing. It can seem overwhelming when you have so many options available – but hopefully, we’ve provided you with a bit of guidance for the process. Happy hunting!
