Finding the right mortgage involves some digging. Interest rates, points, processing costs and adjustment features all affect how well a mortgage suits your needs.
1) Current Offerings
To find out about lenders’ current offerings, you have a couple of options: call lenders directly, or google lenders in your area and interview them to see if they are a good fit. . If you prefer to get a referral, reach out to a local real estate office or a trusted advisor like your CPA or financial planner, or perhaps your new neighbors next door that bought a few months back.
Just remember, you won’t know what interest rate and loan amount you’ll really qualify for until the lender knows your credit score and the amount of your current debt.
2) Options To Consider
Some options to consider before looking for a mortgage loan is how long you plan to stay in your home. If you plan on staying in your home for years to come or indefinitely, then locking in a fixed rate, especially when it’s relatively low is a good idea. Look for the best rate you can get. Paying 5.0% rather than 5.5% on a $100,000, 30-year fixed-rate mortgage will save you $64 each month.
On the other hand, if you plan to put the house up for sale in three to five years. Choose a hybrid ARM with an initial fixed-rate period (typically three, five or seven years) that matches how long you plan to stay.
3) Ask Questions
Ask yourself these questions to help you decide which route to go:
- Will your down payment be small or large?
- Do you want a long-term or shorter-term loan (15 or 30 years)?
- Do you want a fixed-rate or adjustable-rate mortgage?
- Will you pay points for the lowest-rate mortgage or will you shop for a loan with few or no points and therefore a higher rate?
Determine what matters most to you when selecting a mortgage lender. Is it interest rate, monthly payment, lender fees, loan program, lender rating or ability for the loan to close efficiently from start to finish, then make your decision accordingly.
4) Personal Attention
Pay attention to how the lender responds to you when you first contact him or her. Are they prompt to respond to your initial contact? Are they friendly and courteous? Do they honor their quote that you saw online or in an offline ad? Are they willing to explain things to you or educate you about different choices? Do they discuss when/how rates will change?
And lastly it’s a good idea to check out the lender’s reviews. Check to see if there are any unanimous complaints or concerns from other customers, or better yet, rave reviews from all of their happy past clients!