Choosing a Lender
Purchasing your new home is an exciting time, whether it’s your first time or you’re a seasoned pro, a new house is a fresh start. Navigating through the home buying process can be challenging for the first time, which is why it’s a great idea to work with a realtor.

As a first-time homebuyer, there will be many questions about what to do and how to buy a home. This handy How-to guide to buy a new house can be an excellent starting point. One part of the buying process is finding a reputable lender that provides great service, which works to build a relationship with homeowners, and will be great to deal with over time. There are several things that buyers need to do before choosing a lender that works for them.
Prepare and Conduct Research

Part of preparing for purchasing a new home includes organizing paperwork, paying off debt and improving credit, and gathering a down payment. New homeowners have a lot to manage during the big purchase. Many buyers plan months to years in advance to ensure they’re financially prepared for the purchase of a new home. One of the crucial parts of the process is having an excellent credit score. Having an impressive score will determine the interest rate the lenders will provide. The best and most effective ways to increase credit scores include paying bills on time, paying off debt, and having a low utilization percentage. Having a sizeable down payment also reflects positively to lenders. Once the paperwork and basics are covered, it’s time to research lenders. 

Types of Lenders

Homebuyers have a few options when it comes to the type of lender they can choose. The three main types of lenders are Banks, Credit Unions, and Correspondent Lenders. Banks are the most traditional lenders, and likely the first place buyers look to when considering getting a mortgage. Credit unions are an excellent option for those who already bank with one to keep their finances in one place. Because they’re member-owned, they have some flexibility when it comes to interest rates. Correspondent lenders are third-party companies who lend buyers the principal amount and then sell the mortgage to a company within their network. 

Shop Around

When it comes to any big purchase, homebuyers should shop around when it comes to lenders. Meeting with several different banks or companies is beneficial if there is a better fit or lower rate with someone other than their financial institution. Many buyers start from their couch, researching reviews, testimonials, or asking friends and family for recommendations. Some online estimators can generate a ball-park figure for interest rates. Still, it’s not an exact science as credit scores aren’t typically factored in, so buyers are armed with knowledge before meetings. There’s no shame in meeting with several professionals to ensure their customer service level meets or exceeds expectations, budgets are met, and interest rates are great.

Get The Pre-Approval Process Started

When buyers are ready to start shopping, it’s imperative to get pre-approved to determine the end budget. Once the pre-approval is done, buyers can put offers in on homes without having to wait for approval, in case they find a property they love that has a few interested buyers.

Ensure Lenders are Providing Answers

Buyers shouldn’t be afraid to ask all the questions they need to feel comfortable in their purchase. Essential details to consider might be how missing a payment works, what criteria are required for getting a better interest rate or getting approved, how to pay the lenders fees, and any other questions that may come up. A professional and courteous lender will be happy to answer any questions and ease any fears.

Buyers have a lot of options when it comes to choosing a lender, and it’s important to give their business to the one that fits their situation best. Meeting with several lenders, conducting research on the best companies to work with, and asking questions are significant aspects of choosing who should provide their mortgage. Lenders know there is a lot of competition, so choosing one who provides an excellent client experience should be easy to find.