Are you in the process of choosing a lender? Don’t make a quick decision you might regret.
Purchasing a home is the largest purchase many consumers will ever make and many will turn to a mortgage lender for financing. But searching for a lender you click with could be challenging, especially if you wait too long.
Buyers need to start talking to lenders early on in the process before you fall in love with a house and compare several quotes. Don’t end up choosing a lender based on convenience.
Dodge buyer’s remorse
21% of home buyers reported buyer’s remorse over their mortgage lender.
Buyer’s remorse has risen to 27% among first-time home buyers. This is due to unmet promises, a lack of communication and feeling pressured to choose a specific mortgage product.
Home buyers are most satisfied when a mortgage lender cites friendly, quick, clear responses and fair pricing. Click here to speak to our knowledgeable lenders!
Finding the right lender
It’s imperative to find a lender or broker who communicates well with you in a manner you are comfortable with. This rule applies when you are meeting face-to-face with a lender or working online and over the phone. Does the lender clarify things well? Is he or she willing to give you the time you deserve or does the conversation seem irritated and rushed?
We suggest asking these five questions:
Is this the right time for me to buy a home?
The lender’s answer should depend on your circumstances. This includes your debt-to-income ratio and how much you plan to put down. It’s important that they explain your situation in a way you understand.
Which personal debts should I pay down before closing?
Lenders need to explain what they are looking for in your credit history and ways to improve your credit score. According to Experian, on a scale ranging from 300 to 850, a credit score of 700 or higher is generally considered good. A score of 800 or higher is considered excellent. If you are not sure what to expect, you can order your free credit report online here.
Would it be a good idea to pay points to lower my interest rate?
Your interest rate might be paired with mortgage discount points. One discount point typically amounts to 1% of the loan amount. So one point on a $250,000 mortgage would be equal to $2,500. A lender needs to explain the options. It makes sense to pay points if you plan on living in your home for a long time.
How much do I need to pay at closing?
Do I pay by wire transfer, check or bank check? Make sure you truly understand how the money will be transferred when escrow closes. According to the Federal Trade Commission, there has been an uptick in scammers swiping the home buyer’s closing funds during electronic transfers.
Who will ultimately service my loan?
A servicer is the company that collects and deals with late or missed mortgage payments. A few lenders service their own mortgages or outsource servicing. Other lenders may sell the mortgage. While you have no say on who will service your loan, this question will give lenders the opportunity to talk about the scope of their commitment and business to you.
Purchasing a home is an exciting time. Contact The Kolesar Team here to discuss the best loan options for your needs!