Tips For Choosing Your Lender

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Your Lender

It is a good idea to check with at least three lending sources as the points fees and programs can vary greatly. Lenders can have access to a wide variety of programs and options. This will help to choose what fits best with your needs.

You should discuss your financial situation in detail with a mortgage lender before you shop for a home. By enlisting this critical member of your real estate team in advance, you will benefit by having a realistic assessment of your price range before you shop. You should consider submitting a formal application for written loan pre-approval.

This will give you the ability to shop with confidence, and may give you an edge with home sellers.

When speaking with prospective lenders, ask about all loan costs and fees, not just interest rate and service charges (points). Find out whether a prospective lender can realistically meet your closing time frame and that of any financing contingency you may have.

Once you have selected a lender:

Contact your Realtor to help in the process and offer more knowledgeable advice and additional clarification.

Prior to making your loan application, ask your lender what documentation you will need to supply and take it to the application meeting.

Make sure you do not lock in a rate that will expire before your contract closing date. Check interest rates averages.

If your lender suggests a co-signer, or a particular method of holding title, consult with your attorney and/or tax advisor before agreeing.

Find out whether your lender will require escrows (reserves) for property taxes, insurance or private mortgage insurance.

To avoid delays, resist the urge to continue shopping with other lenders for a better rate once you have applied.

If you are told your loan is approved, expect to see a written commitment and scrutinize it for conditions to be fulfilled (e.g., appraisal, explanation letters, copies of checks) before the commitment is binding on your lender.

At the closing or before, review the "good faith estimate" of closing costs supplied by the lender to verify that the various fees charged by the lender are consistent with those you were quoted at application.

Your Realtor is familiar with the mortgage loan process, can help you understand the information you get from your lender, and can monitor your lender to keep the closing on schedule.