People spend a lot of time looking for the perfect home. There are the countless hours spent poring over real estate listings, the weekend trips to open houses, and the days of driving with your realtor from showing to showing. However, choosing a mortgage lender or broker is often treated as an afterthought—many buyers simply go with their own bank or a broker/lender recommended by their realtor without researching competitive rates and looking for lenders who will also educate them.
This is a critical mistake.
You put in a lot of effort to find your ideal home because you’ll be living there for years—maybe even decades. And as long as you’re living in your home, you’ll be paying for it. That’s why it’s important to take the time to do your research and find a mortgage loan officer (at a broker or lender) who can offer you competitive rates and an education. A good mortgage loan officer will be your ally throughout the home buying process, answering your questions and providing support as you jump through all the hoops to secure a mortgage.
The Difference Between Mortgage Lenders and Brokers
Before we jump into how to choose a lender or broker, let’s clear up some confusion. The term broker and lender are sometimes used interchangeably, but they’re actually two different things.
A mortgage lender handles the entire process from start to finish. They lend the money needed to purchase a property to the buyer directly. Then buyers pay the mortgage lender back directly. However, some lenders may sell mortgages to other institutions instead of servicing the loan on their own.
A mortgage broker is a middleman who works as a go-between lenders and buyers. A mortgage broker typically has to use an appraiser and underwriter from the bank they are brokering the loan to, which means they can lose control of the workflow and the speed of the transaction.
How to Find a Good Mortgage Lender or Broker
So how do you find the best mortgage broker or lender for your needs? It requires a little bit of research, but it’s not much different from what you’d do when hiring any other professional service.
1. Ask Around
If you have friends or family members who have recently purchased a home, ask them whether they have used a lender or a broker and if they had a positive experience. Do they like who they used? Contact the brokers and lenders for more information.
Your real estate agent can be a source of recommendations as well. They have established relationships with a small group of lenders or brokers and it may be worthwhile to ask for referrals to lenders they trust . Keep in mind, their opinion of a preferred lender may be skewed by their relationship.
2. Read Online Reviews
Reviews are another way to source a mortgage loan officer. Google and Yelp are terrific sources for online reviews of mortgage brokers and lenders. These reviews come from customers just like you; they’re often quite detailed and they can give you an idea of whether a broker has a personality you’ll mesh well with, whether their communication style is what you’re looking for, and, of course, whether they can secure you the type of mortgage you need.
If you’re considering a mortgage loan officer and can’t find any reviews online, that may be a red flag—mortgage lenders and brokers with sufficient experience in the industry should have numerous reviews online.
3. Check Out Their Websites
Once you’ve narrowed down your choices by asking for recommendations and researching reviews online, it’s time to start looking at mortgage websites. And by looking, we don’t just mean looking—we mean really reading through to see the types of mortgage products offered, the experience a loan officer has in the industry, details about how they work, and tools offered on their website to make the home buying experience easier for you.
You should never judge a book by its cover, but a shoddy website that lacks the information you need is not a good sign when you’re trying to choose a mortgage broker or lender.
4. Schedule a Meeting or Call
The next step is to reach out to potential mortgage lenders or brokers. Even making this appointment can tell you a lot about the person or institution you’d be working with. Are they responsive? Do they return your calls promptly? Are they warm, friendly, and engaging, or cold and distant? You’re going to be working closely with any lender or broker you choose, so don’t underestimate the importance of choosing someone you truly like on a personal level (provided they also offer competitive terms and will educate you throughout the process).
Prior to your phone call or meeting, write out a list of questions you’d like to ask. Note their answers so you have them on hand and can compare what each potential broker or lender tells you. If you’re looking for a specific type of loan, like FHA or VA, be sure to ask if this is a product offered before asking any other questions. Ask what type of mortgage they think is best for you, the processing times they anticipate, and what documentation you will need.
5. Find Out About Fees
This is a question you should always ask during your meetings with mortgage brokers and lenders These fees and charges are often what separates a good mortgage source from an unscrupulous one. Ask for a list of fees that you’ll see at closing. Here are a few mortgage fees you should be aware of:
- Appraisal fees cover the cost of a licensed appraiser to go out to the property you’re purchasing and make sure the agreed upon sale price is supported.
- Origination or broker fees cover the cost of processing and underwriting your mortgage application.
- Flood Certification Fee is a fee charged to obtain the government-required document used to determine whether the subject property is located in a flood plain.
- Credit report fees.
6. Look at the Bigger Picture
Crunch the numbers. Maybe all things are equal, but one loan officer has a personal touch that stands out. There may be one who you can tell will spend more time educating you, which saves money in ways that are hard to measure. You need to consider all factors when choosing the best broker or lender for you.
Learn More About Your Mortgage Options
Brian Martucci and his team offer competitive rates and personalized service to homebuyers in Washington, DC, Virginia, Maryland, and throughout the United States. If you’re looking for a top-rated mortgage loan officer with the experience to get you the best mortgage for your unique circumstances, contact Brian Martucci at 202-588-2400 or send him an email at firstname.lastname@example.org.