Finding the right lender for your home purchase or refinance is about balance. Yes, you’re looking for a fantastic rate but you also need to consider customer service, available loan options and the likelihood of being approved in the first place.

Start your research

Consider both offline and online options when looking for a lender. You can start with talking to your bank and local credit unions and then move on to nonbank mortgage lenders or online mortgage marketplaces.

Remember that you can’t just compare advertised interest rates. Ask about loan terms, down payment requirements, special offers, insurance, closing costs, application, appraisal, title, credit report and loan origination fees, and any home buying programs you may qualify for.

To get a feel for customer service, ask how they prefer to communicate with clients and how quickly they respond to messages.

Get pre-approved

To know for sure which rate and loan terms you qualify for, you’ll need to get pre-approved. Most lenders will require the following to process your pre-approval application:

• Social Security numbers for all borrowers
• Bank account and investment account statements
• Two years of tax returns, W-2s and 1099s
• Proof of current salary and employment
• List of all outstanding debt, including credit cards, auto loans, student loans and any other obligations
• Down payment estimate and details regarding where the money will come from

Examine the fine print

What’s written in the contract is what counts, not your perception of what you were told over the phone. Look through any contract for the precise finance terms, details regarding who is responsible for paying which closing costs and fees and any other specifics that affect the overall price of the loan.

Consider future plans

When comparing lenders, it’s important to recognize how your long-term plans can affect which loan choice is right for you. How long you plan to keep the mortgage can make one lender a better choice than another.

Understanding correspondent lenders

Know that some lenders have no intention of keeping your mortgage. Correspondent lenders originate and fund their own loans but then immediately turn around and sell them on the secondary mortgage market to larger institutions. Working with a correspondent lender will not affect the rate or loan terms, but your customer service contact may change after the loan closes.

Speak with a mortgage broker

Alternatively, you can skip all the research and speak with a mortgage broker who already has relationships with a wide selection of lenders. A mortgage broker can look at your exact financial situation and goals and make expert recommendations on which lender is a good fit for you.

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