How to Choose a Mortgage Lender

Now that you’ve decided to buy a home, it’s time to consider how you’ll pay for it.

Mortgages are extremely complicated, and selecting the wrong one could seriously jeopardize your future. Here are a few pointers for choosing your mortgage wisely.

1) Get to Know the Players

Ask a friend or relative who has recently gotten a mortgage if they would recommend their lender. Now, if you don't know anyone who has recently bought a home, just be sure to ask your Realtor®, or someone else who deals with mortgage lenders regularly (a financial adviser, attorney, etc.), to send a list of lenders for you to choose from.

Once you've narrowed down your search, you'll want to check out the lenders online, being sure to push past the advertising and investigate fees, lock-in periods, and qualification requirements.

Remember a small difference in your interest rate and equate to thousands of dollars over the life of your loan. 

2) Go Long

It used to be the emphasis when it came to mortgages was on paying them off as soon as possible.

While this is still true, chances are, if you're an America, the debt you already have or will accumulate due to credit cards, student loans, and auto loans means it’s likely best for you to opt for the 30-year mortgage.

While you'll pay far more in interest you'll have a much lower monthly obligation with the option of paying down the principal when you can afford to make a payment above and beyond your standard amount.

3) Take the Extra Point

When selecting a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate.

If you plan to stay in the house for a long time taking the points upfront will save you money and ease the burden you’ll bear down the road.

4) Draft a Pro

If researching mortgage lenders individually sounds overwhelming, you might consider hiring a mortgage broker to do it for you.

A mortgage broker is an independent contractor who pairs you with lenders by scouring available loans to find the one that best fits your needs. Be sure to research them upfront by looking for positive reviews and testimonials on third party websites. Then, once you've selected one and are ready to move forward be sure that you understand all the terms of your agreement and get everything in writing.

Alright, those are my tips for choosing a mortgage but, if you still have questions I didn't cover, just give me a call or shoot me an email - your favorite Realtor® is just one call away!



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