CHOOSE THE BEST

Home loans are available from a number of institutions, from banks and credit unions to mortgage lenders and brokers. Within a few miles of almost everyone in the U.S., there is a terrific mortgage professional working for a trustworthy company. That is not to say that all lenders and brokers are trustworthy.

How to look for a lender

Finding a mortgage lender involves more than just getting a good interest rate; you want to work with the best mortgage companies, staffed by professionals who will guide you through the process. Below are five tips to help you hunt for the best mortgage lender.

1. Get your credit score in shape to gain more bargaining power.
2. Research your local mortgage lending landscape.
3. Get preapproved for your mortgage to increase offer acceptance.
4. Compare rates from several mortgage lenders.
5. Ask the right questions and read the fine print.

Like the stock market, the mortgage market is fluid and rates change daily. Getting rates from one lender one day and another the next could show disparities that are a product of the marketplace rather than differences between lenders.

Some lenders even advertise rates that are not real. You may see such rates in internet ads and unsolicited e-mails. You’re better off ignoring most of these. It’s a good idea to choose your lender, not let them choose you. And be sure you choose carefully. Some of the loan representatives that you are likely to talk with may not be trustworthy. If given the chance, they may make choices that benefit themselves or their employer rather than you.

How to Find a Trustworthy Mortgage Professional

If you could listen in on 100 phone conversations between borrowers and prospective lenders, you’d find that the most common questions are:

• “What are your rates?”
• “What are your points?”
• “What are your fees?”

Some loan representatives may lie to phone shoppers about rates in order to lure them in. Second, upfront costs probably should not be your main concern. Your goal is to get trustworthy answers about loan choices and interest rates. That can’t be done with phone calls to strangers. Your initial work is in reality about finding someone you believe that you can trust. Begin with referrals, and then make sure to ask the right questions of those who make the referall.

• Did the lender describe the available loans in easily understood language?
• Did he/she lock in the rate that was promised?
• Were there any hidden or unexpected fees that were not fully disclosed in the initial meeting?If they still have the documents, see if the fees on the loan documents were the same as were originally disclosed on that initial Good Faith Estimate.
• Was the broker or banker responsive and able to deal with problems quickly?

Get referrals from real estate agents. Experienced agents can refer you to lenders they’ve worked with in the past. Be sure to ask the same questions you’d ask if you were finding the lender on your own. Use the following list of questions to help you decide if you are satisfied with a lender’s knowledge, experience, professionalism, integrity and commitment to service.

8 Questions to Ask Potential Lenders

• Can you give me the HUD-1 closing statement on the last three deals you completed?
• What are your loan programs? Do you offer VA loans, for example?
• Can I see a Good Faith Estimate right away?
• Could you estimate closing costs for my loan?
• Can you estimate and explain your fees?
• How and when will you earn your income from this loan?
• Will you get approval for my loan locally?
• Are you certain you can get this done in time for closing?

3 Questions to Ask Potential Brokers

• How do you get paid, in points or commission?
• How much will you make on this loan from the lender?
• Name some of your top lenders.