Owning a home is a dream come true to many. Normally, using a mortgage to own a home appears easier than saving and building a house yourself. If I settle for the former, there are things I should consider. Different lenders offer different loan rates and other offers, especially to those who borrow money online. That notwithstanding, there are factors I need to look into. So, how can I know which mortgage lender to go with?
- Consult other first-time home buyers
The best thing to do has always been to consult those who have done it before. As a first-time home buyer, I am unaware of the ropes of trade. This inexperience may prove costly and land me on expensive lenders out to exploit ignorant buyers.
Consulting allows me to know which lender is right for me. A person who has received a mortgage before is likely to know which lenders offer which rates. Not only that, they are aware of which lenders match my budget.
First time home buyers are vulnerable to conmen and exploitation. This tragedy will not befall me if I choose to consult others who have been there before.
- Be aware of credit history and rating
Your credit score is one of the most determining factors lenders will look at before choosing to approve or decline my mortgage application. Being aware of my credit rating will save me the pain of being slapped with declines from lenders wanting higher credit scores.
Aware of my rating, I will only go for lenders I am sure will consider my credit score. It will also save me the hassle of shopping for expensive mortgage providers who will frustrate me.
It does not end at awareness of my personal credit score. Once I know my fate, the next thing to do now is to strengthen my credit. That way, I will be able to qualify for bigger mortgages at lower rates. At that point, I will know which mortgage lenders to run to. I will be confident enough to run to the best mortgage providers in the market.
- Do I have options?
Having options available is another easy way to know which mortgage lenders to go to. This is how it works. Mortgage providers do their homework well to establish who deserve their loans. Once they are certain the subject is qualified and able to repay, they approach him first.
These approaches are the options I have. The more mortgage lenders approach me the easier it becomes for me to tell which one to settle for. I may choose to say yes to one of the lenders giving me offers. Alternately, I could analyze the market and look for other lenders with better terms.
The point is, if I have a list of money lenders that are open on Sunday that are reaching out to me then I have the ability to look out for better lenders knowing I’m well qualified to receive a mortgage from any lender.
- Doing research well
I can never make an informed decision if I am not in the know. Doing my homework well will surely land me the right mortgage provider to trade with. I need to know about mortgage basics and details.
There are different types of mortgages and lenders I need to know about. Besides, there exists facts and fiction about real estate loans I need to distinct. That way, I may be able to make the right mortgage decisions.
There exist various types of players in the mortgage industry. They include:
- Mortgage brokers
- Mortgage lenders
- Hard money lenders
- Portfolio lenders
- Wholesale lenders
- Correspondent lenders
- Retail lenders
All these players have a contribution in the fluctuation of terms and conditions of different mortgages. Being informed involves knowing who does what and how they affect the mortgage I am looking for.
For instance, brokerage plays a role in hiking the total cost of a home loan. Once a middle man is involved, the cost of the loan will shoot up. The result is me having to part ways with more cash in the name of repayment.
If I were to deal directly with a mortgage lender or retailer, perhaps I would have spent less. It is the same case when wholesale lenders are involved. It makes the lending loan chain longer and more expensive. How so?
A wholesale lender rarely deals with clients directly. They only sell mortgages to brokers who pass the cost to the consumer. This chain resultantly makes the buyer pays more in the name of value addition.
Portfolio lenders on the other hand include community banks, loan institutions and commercial banks. These lenders give mortgages to borrowers against their account balance. They are considerably cheaper compared to other lenders.
As a borrower, I need to have all the details aforementioned. Only then will I be able to make a sober lender choice of the options I have. Otherwise, I will settle for the wrong lender and end up messing myself.
- Compare rates
This is the hardest yet easy money decision to make. It is hard because it involves a lot of research, consultation and calls for critical thinking. Furthermore, it requires me to draw a line between lenders who want to make money from me and those ready for a fair deal.
Interest rates determine the cost of the mortgage. It is the first criteria when it comes to which lender to choose. The lower the rate the more likely that lender is right for me. Well, I will know which lender to go with once I establish the rate, they are charging me is relatively low compared to other lenders. I will only be sure about this after comparing with what other mortgage lenders are offering.
The Bottom Line
The question of how I can tell which mortgage lender to go with has been answered. The lender should be relatively cheaper, well rated by other clients and ready to consider my credit rating. That will give room for a fair deal. what is you are borrowing other loans? there are so many options if you want to borrow money online. let us consider that in our next discussion.