You want someone who will give you advice for free, someone who provides easy access, someone you feel comfortable with, someone knowledgeable, and someone who will give a high quality advice.
"You should never work with a lender that is trying to charge you just to answer questions while you are in the information gathering stage," says Doug Perry, who has worked in the Consumer Markets Division for Countrywide Home Loans for 16 years. "Once a borrower does apply it is customary to be charged at that time for the appraisal and credit report. Prior to that, there shouldn't be any charges to get expert advice - running scenarios, the pre-qualification process for a home loan, purchasing the house, and things of that nature are done free of charge at Countrywide."
"One thing a home loan borrower wants to look for is easy access," says Perry. "A lot of homeowners use multiple channels. They might initially search online information at Countrywide, then call one of our call centers on a weekend, and ultimately apply face-to-face at one of the branches. So you want to make sure you are working with a lender that does provide the opportunity to work with you in the manner that you feel most comfortable with. We also encourage home owners to make sure they get access to a high level of advice."
One thing you should NOT do is to make a decision on lenders based solely on the lender that offers the lowest rate. One reason is that some lenders quote a lower rate to get your business and then supplement that rate with additional fees and charges. In fact, you will actually find there to be little difference in rates in fees when dealing with reputable mortgage professionals.
There will be many mortgages to choose from and the differences will not just be limited to your assets or income. You need to know such things as whether there will be a prepayment penalty if you pay the loan off early - among other things. A good lender should explain the differences and analyze your individual circumstances.
You should know the fees you will be charged. You should be provided with a printout of all fees associated with the loan. Ask for a "Good Faith Estimate", showing all the fees you will owe, which will help you evaluate the costs of the loan and provide accurate information that will help you when comparing other lenders.
Ask if your interest rate can be locked in. With some lenders you can lock in a rate at the time of application and for a specific time thereafter. Other lenders, however, will not let you lock in a rate until the loan is approved, you must be given time to close the deal at the rate you qualified for.
Does your lender know the area where you want to buy a home? There may be different loan requirements for different areas. Can you borrow to buy a house in a rural area? Will you be allowed to buy in a mountain area?
Does the lender have the authority to offer government-sponsored loans? Loan programs such as the Federal Housing Authority (FHA), VA (Veterans Administration), and others offer veterans and low-to-moderate income individuals loans with low or no down payments. For example, a qualifying person can buy a home with an FHA loan at an interest rate of only 3%.
Buying a home may be something you only do once or a few times in your life. Picking the right lender and program for you can make the experience much more pleasant.
