You may be eager to buy your own property, but making snap decisions could backfire. Before choosing your mortgage lender, you should consider a few key factors that will help you make the smartest financial move. Keep reading and discover how to choose the perfect loan lender.
What to consider before choosing a lender
There are three main factors you should give thought to before making any decisions between the mortgage lenders on the market:
Types of lenders
Yes, lenders come in all shapes and sizes, and some may suit your wallet and purposes best:
- Credit unions: The shareholders of a credit union have benefits for borrowing money with low interest rates. They can be quite strict with their membership requirements, but benefits abound.
- Mortgage bankers: These work for a financial institution and fund mortgages with their own money or with the money of a warehouse lender. If you apply for a loan from a large mortgage banker, the service mortgages may already be provided, while if it’s a small mortgage banker, the servicing rights may be sold.
- Savings and loans association: This is a financial institution that offers both borrowers and depositors a membership which awards them with the right to vote.
- Correspondent lenders: They basically fund home loans in their own name, but shortly after closing the loan, they sell it to a larger mortgage lender like Wells Fargo. That’s why they usually follow a bigger lender’s guidelines for choosing a borrower.
Best rates
There are manifold comparison websites for mortgages, like Realtor and Bank Rate. The most reliable ones offer you the possibility of stating your principal, the term of the loan, the rate percentage and type, as well as your state. After entering this information, you’ll get a long list of mortgages with the annual percentage rate, the term of the loan and the monthly payments.
Reliability
Ok, since scammers swarm the internet, you have to be on your guard. Secure mortgage lenders include a number near the name of the company, which is the Nationwide Mortgage Licensing System lender. If it doesn’t appear or you don’t find the lender to be trustworthy, search the NMLS database.
Best mortgage lenders
According to Top Ten Reviews, these are the best mortgage lenders right now:
#1- Lendingtree: This mortgage and refinance company collects information from its different lenders to provide the borrower with a range of loan offers for every financial situation.
#2- CitiMortgage: The most attractive thing about CitiMortgage is, no doubt, its below average interest rates and underwriting fees, having a head-start on U.S Bank and Wells Fargo. Besides, it also provides government-program loans that may be convenient for low-income borrowers.
#3- Wells Fargo: The rate-lock program of this bank gives you something to think about, since it reassures you that your monthly payments won’t fluctuate. Though it provides higher interest rates, it’s one of the few options available for those borrowers hoping to find a construction loan. Plus, it offers superb customer service.