Buying a home can be an arduous task. From finding the ideal place to packing up your belongings and passing inspections, it’s essential that your mortgage is handled by professionals. With expert guidance, buying a home shouldn’t be any more of a stress than necessary.
It’s essential to shop around for the best rates and terms. This practice, commonly referred to as rate-shopping, can save you thousands over the course of your loan.
Find a Local Lender
When purchasing a home, it’s essential to find a mortgage lender or broker who will offer the most advantageous terms for your individual situation. Make sure they have an established reputation for helping people obtain mortgages and providing top-notch customer service throughout the process.
Mortgage lenders such as credit unions, banks and mortgage bankers offer loan packages. These companies package and fund the loans with their own money or borrow money from other lenders in order to originate loans which they then sell on to investors or agencies like Fannie Mae and Freddie Mac.
Banks and lenders such as Rocket Mortgage provide online services. Nevertheless, there are numerous reasons to use a local lender when purchasing a home.
First and foremost, local lenders have the advantage of being able to meet you face-to-face. Furthermore, their staff is available locally to answer questions and give you personalized service when needed. Some even provide extended hours so you can speak with them on weekends or after business hours.
Another advantage of choosing a local lender is their more adaptable mortgage programs and lower interest rates compared to their national counterparts. These two elements can significantly impact your overall budget in the long run.
Furthermore, local lenders often have the capacity to negotiate with other mortgage lenders in order to get you the most advantageous rate and terms on your loan. This could result in saving tens of thousands of dollars over the course of your mortgage.
Utilize tools such as our rate comparison tool to search for mortgage lenders and determine what rates you qualify for. It is also wise to check your credit score before applying, in order to gain insight into your financial standing and determine how it could impact your chances of getting the best rate possible.
Thirdly, asking friends or family for a referral can be an effective way to find a reliable mortgage lender. They may have had previous experience working with certain lenders or brokers and can offer valuable insight based on their knowledge and skillset.
Your real estate agent is an invaluable resource for mortgage brokers. They often have connections with lenders who specialize in the type of home you’re searching for and can connect you with a reliable lender with programs you might qualify for.
Selecting the ideal lender can seem overwhelming, but it’s worth making the effort to get the best deal for your situation. Studies have demonstrated that shopping around can save a considerable amount of money and effort over the course of your loan.
Credit Union Lenders vs. Banks
When looking to purchase your first home, it’s essential that you know which lender is suitable for you. Banks make up a large part of the mortgage market, but credit union lenders offer several advantages such as lower rates and fees along with superior customer service. These member-owned institutions may be less expensive than their bank counterparts but still provide great options.
Before applying for a loan, it’s wise to compare the different offers from credit unions and other lenders and decide which one best fits your needs. Your chosen lender should provide personalized rate estimates that take into account factors like credit score, income level and other aspects.
Credit unions are non-profit organizations owned primarily by their members. Their mission is to offer the best financial products and services for their members, often offering lower fees and higher interest rates on savings and loans than banks offer.
Credit unions typically require membership before offering loans to new members, and their lending policy is stringent. Therefore, you need good credit in order to be approved for a mortgage loan from one of these financial institutions.
Credit unions tend to have smaller networks of branch locations and ATMs than larger banks, yet they still provide excellent customer service. Furthermore, some may provide financial literacy resources for their members.
Banks, on the other hand, are for-profit businesses whose sole aim is to make a profit. They typically offer more loan types and often have dedicated mortgage lenders available to assist you with your home-buying needs.
Banks offer a range of loan products, such as auto and student loan programs. Furthermore, banks tend to provide competitive interest rates on credit cards and other consumer credit products.
They provide more robust investment services and savings vehicles, such as money market accounts and certificates of deposit.
Many people find that credit unions offer a better customer service experience than banks do. They typically charge fewer fees and offer better rates on savings and lending products, plus their staff tends to be more attentive when it comes to customer service inquiries.
If you’re thinking about using a credit union for your loan, be sure to prequalify with online lenders on NerdWallet and then compare their estimated rates against one from your credit union. Doing this is an efficient way of discovering how likely you are to get approved and how much money can be saved over the life of the loan.
Credit unions are less likely to sell your mortgage after its term has elapsed, making them a great option if you want to avoid having your payment transferred to a third-party lender or servicer over the course of your loan.
Once you’ve selected a credit union that meets your needs, apply for a loan by filling out an application online or visiting one of their branch locations. If approved, sign the final loan documents and receive funds within several business days.
Online Lender vs. Traditional Lender
Before selecting a mortgage lender or broker, it is essential to shop around and compare options. Doing this will enable you to locate a lender who meets your needs while offering competitive rates and loan terms.
Comparing lenders is the initial step in the process, and one way to assess their reputations is by reading online reviews. Additionally, asking friends and family about their experiences with a particular lender may be beneficial.
When uncertain of a lender, it’s wise to do a background check and confirm they are licensed in your state. Doing this will give you peace of mind that you are dealing with an established business and help prevent any future issues from arising.
Check if a lender in your state is registered using Google by searching their name. This will reveal whether they have good standing and any recent complaints against them.
Another way to verify a lender’s legitimacy is by checking their website through the WHOIS portal, which will give information on who owns it and how long they’ve been in operation. This can help you make an informed decision about if they are trustworthy and provide some extra assurance when selecting your mortgage lender.
In addition to assessing a company’s reputation, it is essential to review its fees and interest rates. Doing this can help determine if they offer value for your money and if there are any hidden charges that could cost you significant amounts of money in the long run.
Many online lenders allow you to pre-qualify for their loans without impacting your credit score, allowing you to accurately predict what your monthly payments will be before applying. This is especially helpful if taking out a larger loan as it makes the decision process smoother and faster.
Many lenders now utilize automated processes for processing applications, so you can complete your application online and receive funds within a day – saving both time and money if you’re applying for a mortgage or other type of loan. This makes applying easier than ever before!
Some online lenders provide loans for businesses, enabling business owners to access funding through their personal bank accounts. This is an ideal option for those looking to expand their operations or purchase equipment.
However, it’s essential to remember that traditional lenders have more stringent eligibility standards which may make it challenging for small businesses to qualify. Typically, business owners need a minimum credit score of 700 or higher and have been in operation for two years or longer.
Depending on your situation, an online lender may be the ideal solution for you. They tend to have less regulation than banks and therefore offer more lenient eligibility criteria and lower interest rates.