3 Things to Look for When Looking Online for a Mortgage Lender
Ready to buy a new home, you're going to a good mortgage lender--one that specializes in new home purchases. Here are some tips for finding the right mortgage lender in your online search.
Buying a new home can feel a little scary. You don't do it often (maybe only once in a lifetime) and that makes it seem all the more complex and scary.
However, all of this anxiety can be lessened by finding the right mortgage lender to expertly guide you through the new home purchase process.
In this modern digital age that process probably starts with an online search for mortgage lenders or brokers. That's probably what landed you here. It's convenient and simple! However, there are a few things you should look for to ensure that your lender has your interests--and not their own--as their top priority.
Make sure your lender offers options
There are a lot of mortgage programs and loan options other than the traditional 30-year fixed rate mortgage. Depending on your personal needs and financial situation, an Adjustable Rate Mortgage (ARM) or Interest-Only mortgage might be a better fit. You might also want to consider a mortgage loan with a longer or shorter term. The 15-year has always been a popular option and now the 40-year fixed rate mortgage is a newer favorite of many new home buyers.
A good mortgage lender will be able to offer you a wide variety of options. This puts you in control and allows you to pick the mortgage financing solution that best suits your needs. Beware of the mortgage broker that tries to push or guide you into one particular type of loan or doesn't present several financing options.
Get "pre-approved" or at least "pre-qualified"
Many online mortgage lenders with quote you a mortgage rate or monthly payment. That's not good enough in this market. You need a pre-approval letter or at least get pre-qualified for the mortgage you need. This gives you several advantages in the buying and negotiating process. First, you know what you can afford and second it lets the seller know you are serious and capable of buying their home--for the right price.
Depending on the lender you may request a pre-approval or pre-qualification, either way you are ensuring less surprises later in the home buying process. This means that you are authorizing the lender to "pull" and evaluate you credit and several other factors that will be considered in the final approval. Taking this extra step and providing full financial disclosure to your lender will make sure you can get the mortgage you need to buy the home you want.
In this mortgage rate environment--"lock in" the rate you're quoted
Mortgage rates change almost daily and the current trend is upward. However, there is still a great deal of volatility. So if you get quoted an interest rate you like--you'd better lock it in.
Often a mortgage lender will quote you their best rate to get your business that day, if you don't lock it in it can easily float higher before your deal is done.
Generally, you can lock-in a quoted mortgage rate for 30, 60 or 90 days. Reputable home lenders will guarantee your promised mortgage rate, by "locking it in" even though finding a home and closing the loan may take a month, or longer.
Once you've found your online mortgage lender, for your new home purchase, make sure they are willing to offer you options, pre-approve your loan, and lock-in your rate. We at RP Funding are willing to do all that and more to make your new home buying experience exceptional.