How to Find the Best Mortgage Lender for Your Family

How to Find the Best Mortgage Lender for Your Family
Does it really make a difference who you decide to go with for financing your first home purchase? Aren’t all mortgages expensive and going to come in the same basic structures? It does make a difference because while many banks or other lenders advertise flashy mortgage packages, there can be a huge difference in what you pay over the long-term with one lender over what you might with another. There’s several tips you can keep in mind when looking for the right mortgage lender that can help you get a good deal.

Consider The Kind Of Mortgage Products They Offer

When searching for the right mortgage, you’ll usually have to decide between going with a government-backed mortgage such as a Fannie Mae or Federal Housing Authority (FHA) mortgage or a conventional private mortgage. Sometimes these government mortgage programs are good choices, especially for those who don’t have great credit or a whole lot of cash reserves to make a large down payment with. Some also allow you to buy a low priced home in which you’ll have remodeling done by an approved contractor, and then see the value of the property go up over the years. But sometimes certain conventional mortgages are better since they may allow more flexibility with refinancing into shorter or longer terms, offer adjustable interest rates, and not have as many hidden fees. It’s good to go over all the mortgage programs the lender offers and know which one would be the most affordable for you.

Consider Who They’re Affiliated With

Mortgage lenders are usually either banks, credit unions or independent brokers who can all have different reasons for attempting to steer people into certain mortgage programs. While all of them can offer great deals, banks sometimes try to promote the mortgages that will be most profitable for them because they usually have executives and shareholders who are looking for maximum returns. Credit unions often have a better reputation for the kind of mortgage deals they offer because they’re non-profit organizations who tend to have better customer service and tend to find the kind of loan deals that benefit their customers instead of corporate executives. That usually means lower interest rates and sometimes an easier approval process even for those who don’t have nearly as good of credit. Independent mortgage brokers may also have fairer terms than banks and also have alternative ways of approving people for mortgages.

Consider Whether They Offer Manual Underwriting

One thing that sometimes independent mortgage brokers or other consumer finance groups offer is what’s known as manual underwriting. While most mortgage lenders will want to take a good look at both your FICO score and your credit history in the reports that are on file with the credit bureaus, if they offer manual underwriting you actually could get approved for a mortgage with little or no credit history. What these lenders will do is ask for detailed payment records of things that aren’t reported such as housing rent and utilities, and using this alternative credit check will be how they determine the borrower’s risk. There are not many mortgage lenders who offer manual underwriting, and those who do may also require a larger down payment. But you may have an easier time getting approved this way than you would with other mortgages.

Consider If You Want To Get A Mortgage Online

If you’re savvy with applying for mortgages and want to get one quickly without waiting for an appointment with a loan officer, there are online banks and peer-to-peer lenders offering mortgages. The paperwork is all online, your documents can be scanned and sent in, and much of the process is automated and can lead to quicker funding. However, this isn’t for everyone since some people aren’t as comfortable without in-person guidance, and first-time homebuyers may need in-person help for each step of the buying process. But if you’re tired of the old ways and want the speed of technology to help you get a mortgage, an online mortgage lender or mortgage service may be just what you’re looking for.

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