Compare Mortgage Lenders Before
You Choose One

Getting a mortgage is one of the most important financial decisions in your life. Because of this, finding a home loan lender requires some research and time. Comparing mortgage lenders can help reduce your overall costs.

There are a few places where you can get your home loan. You can obtain your loan from a banker. A bank or credit union can have the highest fees. The loans are funded in house and are best for borrowers with high credit scores. Mortgage brokers will have much higher fees, however, they shop around for different bankers to suit your needs. Many people think of them as the “middle man” between you and the bank lenders. They make money by adding fees to the costs charged by the bankers. If you have had some credit problems, or are purchasing an unusual piece of real estate, a broker may be right for you.

Finally, go online for lenders to specialize in finding loans for borrowers. Even with the lowest credit scores you are likely to get an online mortgage loan. The interest rates and terms are comparable to the others. If all else fails and you don’t qualify for a loan anywhere else, you may want to try a sub prime lender. Generally, of the three or four types of lenders, these have the highest fees.

When you meet with a lender ask questions about the loan costs and credit score qualifications based on loan type. Also, find out the policy for locking in interest rates and points. Points are fees in addition to your interest rate that the lender will charge you. For example, if you are getting a loan of $250,000 and the lender is charging you 1 point, you will pay an extra $2500 along with the closing costs.

A lender will determine how much home you can afford by taking into account the sales price, down payment, mortgage interest rates and other fees. It is best to meet with a mortgage lender before you look into buying a home so you can shop for a house accordingly.