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Choosing a Mortgage Lender

Buying Real Estate

Choosing a Mortgage Lender

Whether it’s your first time buying a house or you’re a seasoned homeowner looking to buy a new house, the steps are always the same. Before you even begin looking for a home, you need to find a mortgage lender. Mortgage lenders offer money for real estate purchases, and there are different kinds of mortgage lenders as well, including traditional banks, credit unions, and online mortgage companies. Lenders also differ because they have higher or lower rates and fees, varying levels of customer service, and different requirements and/or qualifications. You also need to look for lenders that offer the type of mortgage you need. Follow the suggestions below, and you will find the perfect mortgage lender for you in no time!

Improve Your Credit Score

The higher your credit score, the more options you will have when choosing a mortgage lender. Mortgage lenders have different credit score requirements, and the score required to get a mortgage varies by type of loan and lender. You first need to find out your credit score, and then you may need to work on improving it from there. Improving your record will also help you improve your debt-to-income ratio, another factor that will help you find a suitable mortgage lender. Lenders evaluate your debt-to-income ratio as well. Once you raise your credit score and pay off your debt, you will have more money to save for a house down payment. This first step helps to make the rest of the process easier for you.

Get the Right Loan

Figuring out which type of loan you need goes a long way while looking for the right mortgage lender. There are VA, FHA, conventional, and jumbo loans. Loans also vary by term. While some may be for 15 years, others maybe 30 years or perhaps something else entirely. Interest rates are also different. Some mortgages may have a fixed rate, while others may have an adjustable rate. Lenders can specialize in certain types of mortgages while others offer a broad mix, so it is crucial to figure out what kind of loan you need and then choose your lender from there.

Compare Rates

Comparing rates from multiple lenders helps you not only find the best lender but also to save money. To ensure you have a range of options, seek quotes from at least three mortgage lenders. You can look for lenders online and at your current bank or credit union. While comparing rates, there are a few things to keep in, including fees, interest rates, monthly payments, private mortgage insurance, down payment requirements, and closing costs. The financial institution you frequent is a good place to start because they usually offer deals for existing customers or potential borrowers referred by family or friends. Narrow your choices down by looking for the lowest rates, and you can’t go wrong.

Get Pre-Approved

Getting preapproved for a mortgage loan helps the whole process of buying a home go by faster and easier for you and everyone involved. If you are preapproved by a lender, they will already have all the information needed to process your home loan. It is possible to get preapproval from multiple lenders as well, which helps you to keep your options open. Preapproval shows lenders, sellers, and real estate agents that you are a serious buyer. There are certain things you will need to provide for preapproval, including your social security number, savings and checking account information, debt obligation info, tax returns, salary information, and rental information when applicable. The preapproval process can take anywhere from one day to over a week, but once it is done, you’ll be one step closer to owning your dream home.

Ask Questions

You should always ask a potential mortgage lender for a loan estimate and find out about their mortgage application process. Don’t hold back on asking questions. There are several questions to consider. Find out how long the loan process will take. Find out who will be your primary contact during the process and how they will stay in contact with you. Ask which steps can take place online and what will take place in people, such as the appraisal or closing. Don’t forget to ask about the interest rate lock. If the closing occurs after the expected date through no fault of your own, you want to know if you’ll be responsible for paying for the extension. While interest rates are certainly an important factor in choosing a mortgage lender, it is definitely not the only factor to consider.

Are you looking to buy a home in the beautiful and sunny Myrtle Beach area? Call us and speak to one of our experienced Realtors at Better Homes and Gardens Real Estate Elliott Coastal Living. We will be more than happy to assist you with whatever stage you are in the buying or selling process.

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