5 Strategies for Finding the Best Mortgage Lenders

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If you think you’re ready to buy a home, it may be time to seek out a good mortgage lender. There are several strategies to employ and each one is effective in its own way. The more patience and diligence you can exhibit as you pursue the right lender, the better.  Each of these strategies for finding the best mortgage lenders can be used together to optimize your outcome.

Check Your Money & Credit

Before you start shopping, give your finances a checkup. Order your free credit report so you can check it for errors and work on optimizing your credit score. It is advisable that you get pre-approval for a loan, that way you can walk in with an idea of what you can spend. You don’t want to be at a disadvantage without one. You will need a minimum FICO score of 620 and should try to get as high a score as possible before applying for a loan.  But once you have your credit score in check and your financials in order, here are some basic strategies for finding the best mortgage lenders. Compare your own research with this site which has reviewed the best mortgage lenders for you.

Seek Out Referrals

The first strategy is the most basic form of word of mouth.  Talk to anyone you know who is a homeowner and get their feedback from what they know about mortgage lenders.  They may have a great one, or a poor one. They will undoubtedly have experience to share. Take in as much of this knowledge as you can.  It may take a while to gather the opinions of your friends and family and that’s okay. Don’t stop until you are satisfied that you have the information you need to move forward.  This kind of feedback is the best form of customer review, because you know personally who the information is coming from and what sort of bias, if any, they hold. That’s why seeking referrals is one of the key strategies for finding the best mortgage lenders.

Search for Reviews

Searching for reviews online can be done in an afternoon.  It can be fun, or tedious, depending on how you feel about that sort of research.  However, it is efficient as you can bounce all over the web and keep tabs open on all of your prospective lenders.  Reading reviews online can be draining process as everybody has a voice. Certain skills are required to decipher which reviews are legitimate, or false.  You also have to be able to filter out the reviewers who seem to have more substantial, or credible feedback about the lender. If you have a knack for this type of work, then you may prefer online reviews over referrals from friends and neighbors.

Search by Type

Unlike the previous two strategies for finding the best mortgage lender, this is a very different angle that requires you gain some perspective on the mortgage lending landscape.  There are various types of lending institutions out there, and you should evaluate these to determine which one is right for you. A credit union, which is owned by members, will give shareholders favorable rates.  Mortgage Banks package loans for consideration from a specific financial institution. Contrariwise, correspondent lenders turn around and sell loans to other banks. For smaller, localized lenders, consider mutual savings banks or savings and loans institutions, which are competitive and more community focused.  However, the latter are harder to find.

Search by Mortgage Rate

Probably the first way you’d think to find the best mortgage lender is by searching based on price.  In other words: who has the best rates. This is a good way of shopping around, but it is far from the only way to choose your lender.  Still, at some point in your search for a mortgage lender, you will be doing some price comparison shopping. You can get some broad ideas of rates online just by browsing a variety of companies. However, the only way to get a truly accurate quote is through an actual loan application, so be prepared for that.  You should get several accurate quotes before making a final decision.

Search by Convenience

As a final strategy, consider the convenience of your relationship to the lender.  It’s one thing to lock in good rates with a reputable company. It’s another thing entirely to maintain a positive relationship with your lender.  Before committing to this long-term arrangement ask a lot of questions, including what their preferred method of contact is. You should also find out what their typical turnaround time is and how long it usually takes them to respond.  While you are hammering down the finer points, address any additional fees. Ask what payments will be required at closing and what will roll into your mortgage payment.

Patience and Research

Each of these strategies alone is going to help you find a lender that suits your needs, but the best strategy is to patiently follow through on all of these tactics.  That way, when the time comes, you can move forward with your home purchase with confidence.

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