How to Choose a Mortgage Lender
When you are in the market for a new home, one of the most important decisions you will make is how will you finance this purchase. If you require a mortgage it's important to do your research and find the best lender for your specific needs. In this blog post, we will discuss what to look for when choosing a mortgage lender and how to apply for a mortgage. We'll also give you some tips on how to get the best deal possible!
The first thing you need to do when choosing a mortgage lender is to shop around. The quickest and most efficient way to do this is to reach out to a mortgage agent or broker in your area. They have deal with several different lenders at a time so they are able to do the shopping around for you. They will be able to match your financing needs to the best lender and best product out there to get you the money you need in order to close on your home as stress free as possible. If you need help narrowing down a mortgage agent talk to family and friends who have recently bought, look up reviews online, or speak with your real estate agent. Real estate agents usually have relationships with mortgage agents already so they can connect you.
Once you are connected with a mortgage agent you will need to provide them with documentation and information in order to proceed with an application to lenders. You will need to provide your mortgage agent with such documents as T4's, tax returns, pay stubs, letter of employment, and bank statements. Most lenders like to analysis at least 2 years of financials in order to qualify you for financing. Make sure you can get your agent these documents in a timely manner; the quicker they have all the documents from you, the quicker they can begin looking into which lenders will be best suited for your home purchase.
When you are comparing your financing options, there are a few things you need to look at:
- Interest rates: This is an important factor when it comes to choosing a mortgage lender. You want to find the lowest interest rate possible.
- Fees: Some lenders charge origination fees or other miscellaneous fees. You want to make sure you understand all of the fees involved before you choose a lender.
- Loan terms: Mortgage loans can have different terms, such as 15, 20, 25, 30, etc. year terms. You need to decide what term is best for you and then find a lender who offers that term. If keeping your monthly payments as low as possible is important right now, then choose a longer amortization period. However, if you want to pay off your mortgage as quickly as possible choose a shorter amortization period.
- Customer service: When you're shopping for a mortgage, customer service is important. You want to find a lender who is going to prioritize your needs. Your mortgage agent can definitely give you some insight on how lenders operate and who they recommend using.
-Prepayment terms: If you want to put lump sums on your mortgage's principle to either pay off the mortgage completely or to pay it off quicker, make sure you understand your lender's prepayment terms. Some lenders only allow you to repay a maximum amount each year otherwise, they may charge a prepayment penalty.
With a little bit of research and help from a qualified mortgage agent, you'll be on your way to homeownership in no time!
Do you have any other questions about choosing a mortgage lender? Leave them in the comments below! We're happy to help!