When it comes to buying a home, most people seem to think that finding their perfect home is the hard part, and, in all honesty, the process can be difficult. However, once you have chosen the home, the real work starts. You then need to choose a mortgage lender. Your choice matters because it can have a far-reaching and long-lasting effect. There are several things that you should factor in when it comes to choosing your provider, so let’s explore.
Types of Lenders
When it comes to procuring a mortgage, there are a number of options for choosing a lender. These choices may vary depending on where you live or where you plan to buy. That being said, you can expect to encounter banks, brokers, lenders and even credit unions. Each option comes with its own benefits and drawbacks, which should be taken into consideration.
Firstly, banks are great for those that want to make their finances more manageable by having them all in the same place. However, sometimes this process can take longer. Next, there are credit unions. Getting a mortgage from a credit union often comes with a lower interest rate and fees, but this is not an option for everyone, and where it is possible, the credit unions often have a limited range of loan options.
Then there are mortgage lenders. Often you can expect more options from then, and they also tend to be quicker than banks when it comes to progressing the application. This is because all of the processes are taken care of in house without the need for outsourcing. Finally, there are also mortgage brokers. It is important to note that the mortgage advisor is not a lender, but they act as a middleman to help you to liaise with the lenders. While they can make the process easier, it does constitute an additional cost.
Choosing a Lender
Now that you know more about the different types of lenders that you are likely to encounter, you now need to know more about how to choose between them. Of course, the primary consideration should be what best suits your needs and your current financial situation. For example, how long do you intend to be in the home? What is your credit score like? What type of deposit are you looking to put down, and how steady is your income? These personal factors are by far the most important, but they aren’t the only things to consider.
You need to filter out your options to suit your specific metrics. If you need to ninety percent financing, then that is what you should use to weed out the wrong options. If your credit score is low, then you should only look for lenders that can help. It might seem obvious, but a lot of people spend their time looking through the wrong options because they haven’t put enough thought into their own needs.
Don’t forget that you are the one in control. You should never feel pressured by a loan provider. You are, in essence, shopping, and the customer is always right. You should always shop around and look at more than one potential provider. In doing so, you can weigh up the pros and cons of each provider to ensure that you are getting the best deal. Home loan comparison sites can prove invaluable in this endeavor. Be sure to use one suited for the destination; for example, when it comes to purchasing property in Singapore, then you have to check out Property Guru; they have tons of resources that help you to get the best deal.
As part of the process, you should also make enquiries about what type of fees you can expect to be responsible for. Depending on the provider, you might find that you are responsible for fees regarding the loan application, credit report, appraisals, processing, underwriting and documentation organization. The amount charged can vary drastically, depending on the provider, and some might not charge them at all.
Once you have started to narrow down your options, you need to come up with a few metrics that you can use to help you to choose. Of course, reading customer reviews is a must; it can help to give you an insight into their business practices. There are also a number of questions that you might want to consider asking too. The answers can help you to make your decision. Things like:
- Does your process take place entirely in-house?
- How long have you been in business?
- Do you charge fees? Which ones? Can you explain them to me?
- What types of loans do you offer?
- What interest rates do you have?
When it comes to choosing a mortgage provider, there are several factors that can inform your decision. Your personal limitations like a low credit score or a previous bankruptcy need to be taken into account. However, the best provider for you will work with you to cater an offer to your needs. Some compromises might be necessary, but you still need to do your research and learn more about the process to ensure that you have the best deal.