Determine the Type of Loan Needed
Before finding a lender, analyze your own financial situation and expectations to determine the type of loan you’ll be needing. Some of the most common types of loans include conforming conventional loans, Federal Housing Administration loans, Veterans Affairs loans, jumbo loans, United States Department of Agriculture loans, reverse loans, and construction loans.
Determine the Type of Lender Needed
Different lender types offer different benefits and drawbacks, and some even specialize in specific types of loans. A few popular lender types include direct lenders, mortgage brokers, correspondent lenders, wholesale lenders, portfolio lenders, and hard-money lenders.
Build Credit Score
Before you dive into the home buying process, double-check that your credit score is accurate and high. Higher credit scores appeal to lenders, and if your score is under five hundred eighty, you may not even be able to qualify for most loans. Get your report from Experian, TransUnion, or Equifax, three of the most reliable credit bureaus in the country.
To save time and money, get preapproved for a mortgage. Most lenders require a lengthy assortment of documentation, such as a driver’s license, social security number, residential address history, pay stubs, two years worth of tax returns, banks statements from the past sixty days, list of all checking, savings, and brokerage accounts, employment and income history, and down payment information.
Ask About Fees
Some lenders are unclear about costs such as document preparation fees, closing and appraisal costs, prepayment penalties, and more. Before choosing a lender, ask lots of questions about specific fees and potential fees. An honest, reliable lender will be patient and willing to elaborate on all fees and why you’ll be paying them.
It’s easy to be duped by lenders, especially if you’re a first-time homebuyer. Before committing to a certain lender, compare their rates with the rates of other lenders. Create a budget for yourself to determine exactly how much you can spend on lender fees, and then choose the lender that aligns closely with your expectations.
Ask About Areas of Expertise
As mentioned earlier, specific lender types may specialize in different financial situations and loans. Therefore, as you look for a lender, ask about their areas of expertise and set some time aside to research them and their reviews.
Ask About Processing Time
If you’re on a time crunch, find a lender that is known for speeding up the loan process. First, determine how much time you can afford to lose throughout the process and then work with your desired lender to make that happen.
Graystone Mortgage is a mortgage company in Salt Lake City that provides high-quality financial services.