Financing the purchase of a house from personal savings might mean a mighty long wait for the end of rent-paying. This reason is why most homeowners in the US today are using mortgages. If you want to buy a house and don't have enough in your savings account, you will want to hook up with a lender. But how do you know which lender to choose from the myriads out there? Here are some key pointers:
Interest rate
The interest rate should be the deal breaker when choosing a lender. Take time to compare the rates of as many lenders as you can. You will find several tools online that can help you do this quickly. Some mortgage companies will offer you a loan with a down payment of as little as 3% of the purchase price, but they make up for this with a higher interest rate.
Speed
With some lenders, you may have to wait months before your approval sees the light of day. Such lenders will typically require you to fill a plethora of forms when applying for your mortgage and support your application with a ton of documents. Many innovative lenders have come up with platforms that allow you to upload documents securely and complete the entire application process online.
Bad credit
For some lenders, especially traditional banks, a bad FICO score is an automatic "no". Others will still extend financing to you even if you have a credit rating below 600. However, perhaps you should keep in mind that such lenders will make up for the risk they're taking on with a higher interest rate.
Reputation
You may have a referral to a lender from relatives or colleagues, but before you begin your application with them, do a bit of digging of your own. What reviews come up when you search on independent online sources? Consumers Advocate has a listing of top-rated lenders, as do many other referral sites.
Customer service
How quickly does the lender respond to queries, and do they provide comprehensive feedback? If you would rather talk or meet your mortgage officer during the application process, is that option available? Some companies operate entirely online, with no brick-and-mortar presence. If you would rather have that personal touch, you could be better off with a traditional bank.
About the Author
Julie Pieczonka
Hi- I am Julie Pieczonka and I would love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I would be honored to put my real estate experience to work for you.
I am a retired fitness education and health education teacher. I decided to satisfy a long-time goal of mine and become a Realtor. This continues my desire to serve others and am so fortunate to have had amazing success. I served as an Ohio & Indiana Realtor, was a member of the Ohio Association of Realtor's President's Club 2015, 2016 & 2017; and a member of the Cincinnati Area Board of Realtor's Circle of Excellence Club 2015, 2016 & 2017. Realtor of the Year for Sellstate Platinum Realty in 2020.
My husband and I (and our two golden retrievers) have become permanent Florida residents as I acted as a referral agent only in Ohio and Indiana from 2018 through the present.
I am actively practice my love for Real Estate here in the Sunshine State.
I absolutely enjoy assisting my clients in one of the biggest decisions they will make in their lives —that's buying and selling real estate.
Cordially-
Your Active Agent,
Julie
