How to Choose a Mortgage Lender

One of the biggest challenges of buying a home is choosing the right lender. As with any big purchase, you should shop around for the best deal.

Know Where to Look

When you're shopping for a mortgage lender you need to know where to look:

• Traditional banks: Conventional banks offer a wide range of financial services, including mortgage loans.
• Credit unions: Like conventional banks, credit unions also offer a range of financial services including home loans.
• Online mortgage companies: Nonbank lenders often offer their services completely online and usually specialize in mortgages.
• Mortgage brokers: A mortgage broker will help you sort through the choices and find the one that's best for you.

Be Prepared

When shopping around for a mortgage, you need to be prepared so you'll get the best deal possible. Check your credit report and take steps to improve your credit score. Save for a down payment and be able to prove that you have a stable income.

Ask the Right Questions

• How long does the application process take?
• Who will I communicate with?
• What steps happen online and which ones will need to happen in person?
• Can I get a rate lock, and what timeframe do you recommend for that?

Compare Offers

Once you've gathered information from different lenders you'll want to evaluate your options. First, take a look at the interest rates you've been offered. Then compare fees including underwriting fees, application fees, and closing costs.