Are you looking for a mortgage and have started the process of shopping around? Finding what you are looking for to fit all of your criteria can seem like a needle in the haystack. Forbes Magazine recently did an article on things to consider when you are shopping around for a home loan. Buying a home is one of your biggest financial decisions that you will make so knowing what to look for is key to getting the best loan for your home purchase. You can get these three tips below.
1. Ask for referrals and Check Reviews
Start by asking someone you know who has recently gotten a mortgage to see if they would recommend their lender. Ask a financial adviser, business colleague or real estate agent you know to help you write a short list of referrals. An agent should be able to provide you at least two options. Anything less, and you might question whether there’s a financial interest in the relationship between the agent and the mortgage company they suggest. Often national lenders referred by agents end up offering higher interest rates when compared to local mortgage companies.
Check online sites for reviews about the lending companies that you are looking to work with. Reviews from recent customers can give you insight into other peoples experiences and can help you make an informed decision.
2. Get Pre-Approved First
In today’s competitive market, many buyers skip this important step when they start looking for a home. A pre-approval allows you to confirm how large of a loan you can qualify for based on several factors. It also positions you to make a serious offer when you find the home you want to buy.
For a pre-approval, the lender verifies the buyer’s application information through income and asset documents provided by you or retrieved directly by the mortgage company. Many lenders can also provide a “prequalification” online, based on unverified information provided by the buyer. However, most sellers don’t give much value to a letter that doesn’t state the information has been validated. The most important thing is to take the time to provide what is needed for a thorough pre-approval process.
3. Evaluate The Rates, Level of Service and Loan Processing Time
The internet is filled with “discount” mortgage financing options with great rates, but often they are not able to quickly close your mortgage or offer you the level of service you need. On the other end of the spectrum you have the large, national mortgage companies that purport to offer both great service and value but in reality are not able to give you a competitive rate, and the service is not on the level you might receive from a local company.
To view even more tips for shopping for a home loan you can check out Forbes Magazine and the resource article here.