Tips for Choosing the Right Lender

Tips for Choosing the Right Lender

When you are starting your home buying process one of the first things your agent will ask is if
you have been pre-approved. This is important for many reasons; the main reason is to know
how much of a house you can afford to purchase and what type of loan you are going to be
using. The loan type and amount will let us, your agent, know what your price point is and where
to look. While many parts of the process are the same across the mortgage companies there are
few things you want to look at and below are tips for choosing the right lender.

First is what are the different loan types, the main types of loans for purchasing residential real
estate are:

• Conventional
• FHA
• USDA
• VA

Why does the type of loan matter? The type of loan matters because FHA, USDA, and VA are
government backed loans. These loans have a different set of guidelines for what the home has to
have in order for the loan to be approved by the appraiser. These loans can also offer lower down
payments.

Next is to know where you can get a loan, there are different options:

1. Banks
2. Credit Unions
3. Mortgage lenders not affiliated with a bank
4. Mortgage brokers

There are other options than the ones listed but this is a start. At traditional banks mortgage loans
are part of the services they provide to their customers; you do not necessarily have to be one of
their customers to get a loan. Credit unions you do have to be a member to get a loan and they
have member only deals that you may be interested in. Mortgage lenders that are not affiliated
with a bank, they are companies that only provide mortgage services for a specific company.
They do not offer other services like banking; they may also have a faster turn time for the loan.
Mortgage brokers work with multiple lenders, most of the time they only offer mortgage
solutions but will help you choose one of the lenders, they work with, that best fits your needs.

Finally, when preparing to speak with one or more lender there are some questions to ask you
will want to ask.

1. How long will process take?
2. Is the person you are currently speaking to going to stay your main contact or is
   that going to change as the process progresses?
3. What will we do online and what will we need to do in person?
4. Do you have an interest rate lock? If so for how long? If closing doesn’t happen
   by that date, will I have to pay to extend my rate lock?
5. What are the fee’s associated with your company and my loan?
6. If working with a mortgage broker here are a couple extra questions to ask

• How many lenders did you submit my information to?
• Why did you select this lender?
• What, if any, additional fees are involved?

Preparing to get a mortgage can seem tasking but is worth it in the end. There are few things you
can do to get ready.

1.  Check on your credit score and make improvements as needed (many lenders will
   help guide you through this process as well)
2. Save for your down payment and closing costs
3. Make sure you have a stable source of income that is provable

While all this might seem like a lot, your Realtor and the lender you choose, will be there to
guide you through the entire process. Click Here to find out what Title Insurance is and why it is important.

Crystal Zabel, Realtor
“Your Crystal Clear Realtor”
Coldwell Banker Professionals
67395 Main Street
Richmond, MI 48062
586-727-2741 – Office
810-683-4560 – Cell
micrystalclearrealtor@gmail.com
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