How can home buyers feel more confident when choosing a mortgage lender?
I strongly believe in using local mortgage lenders, especially credit unions and local banks with large mortgage businesses. Buyers in today’s market must do their best to convince sellers that they will indeed close a deal on time. Even in the case of loans that have been pre-approved, there are final checks that the lender must carry out before financing the loan. When a problem arises, it really helps to have a real, live person that you can meet. face to face quickly solve this problem.
More importantly, local lenders depend on good relationships with local realtors, and if they don’t take care of you, it will directly impact their future business. When I hear about funding problems causing a property closure to fall apart, it is almost always due to the borrower choosing a national rather than a local lender.
What advice would you give to members of underserved communities who want the best mortgage rate possible?
Remember that the loan with the lowest interest rate is not always the least expensive. You should also consider the upfront fees that the lender will charge. Study the loan estimate carefully and make sure that you understand all the fees that are indicated in it. Your lender should be willing to spend all of the time to help you explain all this.
If you plan to keep the loan for a long time (more than 6 or 7 years), the annual interest rate shown in this disclosure is a good indicator of the true value of the loan. On the other hand, if you are planning to relocate in less than 5 years, you probably want to opt for a loan with the lowest possible upfront fees, even if the annual interest rate is higher.
Finally, after you have selected a lender and are ready to close your loan, make sure you carefully read the closure information you receive from your lender. Compare this to your original loan estimate and make sure you understand any differences. Once again, your lender should be willing to discuss this with you if you have any questions (another reason it is good to have a local lender).