Take some time to comb through Earns And Hacks' tips so you get the ideal mortgage lender for you.
Determine your down payment
It’s important to understand how your down payment can impact your mortgage rate, options and monthly fee before you even think about diving into a mortgage application. Saving for a 20% down payment is no longer a requirement, but there are plenty of reasons why a larger down payment may be a smart idea. Many conventional and government-backed loans allow you to put less than 20% down on a home so you’ll want to be aware of the cost of private mortgage insurance (PMI).
PMI is monthly insurance that you’re required to pay when your down payment is less than 20%. Note: This monthly insurance protects the lender — but it doesn’t protect you, the borrower. Once you know how much of a down payment you can afford, you can better assess which type of mortgage is best for you and find a lender that meets your financial needs.
Know your credit score
There are methods for securing a mortgage with bad credit but it’s important to know where your credit stands. Homebuyers with higher credit scores often have access to more mortgage products, additional options and better rates. Are you repairing your credit? It can be worthwhile to search for a lender that uses alternative credit to help verify your eligibility. Alternative credit sources can include rent and utility payments. Applicants with low credit scores should expect slightly higher mortgage rates — it’s still important to shop around to find the best possible rate.
Explore local options
Nationwide banks and online lenders might be the most recognizable names in the mortgage world, but exploring local options can help you unlock additional options. Review any credit union memberships you belong to so you can see how they stack up against competitors.
Talk to your agent
It’s important to do your own research when you select a mortgage company.
Your buyer’s agent is a valuable resource who can help you navigate through all steps of the home-buying process — including financing your home. Your agent will likely have connections to popular local lenders and can provide advice on which type of mortgage might be best for your budget.
Conduct outside research
Once you have a solid understanding of your finances and have reviewed local options, you’ll want to research lenders to find out more about the specific mortgage offerings they provide. Be sure to review their rates and compare any features and benefits that are important to you. Talk to loan officers to find out if you qualify for any special programs, like first-time home buyer loans or state assistance programs that could reduce your rate or down payment requirement.
Choose the Best Mortgage Company
Finding the right type of mortgage is just as important as finding the right home. Research the options that best suit your financial lifestyle to help you narrow down relevant lenders. Be sure to explore local lenders, compare rates and talk to your agent for further guidance.
Take your time — a lender might not be the right fit for you if it tries to rush you through the process. Start with our recommended lenders to find your perfect fit today.