Things to Ask Before Choosing a Mortgage Loan Company
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Whether you’re buying a home or refinancing, choosing a mortgage loan company is an important part of the process. With so many companies to choose from, what questions should you ask before you make a commitment? Learn more about choosing the right mortgage loan company for you by evaluating potential lenders by asking yourself the following questions:
Is it a direct lender or broker?
Find out if the mortgage loan company you are considering is a direct lender or a broker. Brokers simply find lenders to do a mortgage for you, while a direct lender processes, underwrites, closes, and funds their own loans. Brokers may charge additional fees or surcharges for their services, so it’s important to decide if a broker is right for you or not. Choosing a direct lender can save you big on fees in many cases.
What’s the history of the company look like?
A good mortgage loan company will have a strong history of closing many types of loans and have a long list of satisfied customers– and a much shorter list of unsatisfied customers. It’s not uncommon for nearly every company to have a handful of complaints, but too many can be a red flag.
You’ll also want to make sure the mortgage loan company has a demonstrated history of processing the type of mortgage that you are going to choose to go with, whether it be FHA, Conventional, VA, USDA, or HARP. Different types of mortgage products require different types of expertise, so be sure your lender has a history of successfully closing the loan product you choose.
Do I prefer a small or large company?
Many people think small mortgage loan companies are better because customer service will be more personal and responsive, but that’s not always true. The important part is making sure your choice of mortgage company is balancing between your comfort levels with those you’ve had business contact with and the collective experience of the company.
Larger companies might appear less personal, but they are more likely to be direct lenders and fund their own loans. Smaller companies may also be direct lenders, so it’s critical to ask questions. You should feel comfortable and confident with the company you choose regardless of its size.
Have I asked my friends, family, or real estate agent their opinions?
Word of mouth continues to be one of the best ways to vet out a great mortgage loan company. Ask your family and friends who have bought homes or refinanced recently what their opinions are on the lenders that utilized. Your real estate agent, if you’re purchasing a home, is also a great resource. They’ve witnessed hundreds of real estate transactions over their career, so they may notice certain trends that other people don’t.
Have I truly done my homework?
Don’t ever make a huge decision like choosing a mortgage loan company without doing your due diligence. While low interest rates are great, rate alone should not be the deciding factor when choosing a lender. After all, what good is a super low rate if your lender is going to give you headaches or cause problems with the processing of your loan?
At the end of the day, your home is likely to be your biggest investment. Choose a mortgage loan company with employees in which you feel comfortable, a history you can trust, and open availability for answering your questions and concerns in a timely manner. Never do something you don’t feel comfortable with. Always ask questions if you have them so that you feel totally at ease with the transaction. A good lender will be informative, experienced, and helpful. As a borrower, you deserve no less.
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