By: Edward McCarthy
President: Sell By Owner Listings, Inc.

Choosing The Right Home Loan Lender

The home loan lender you choose is just as crucial to the home buying process and the loan itself. Consider that your relationship with a home loan lender will last anywhere from 15 to 30 years. From that perspective, it only makes sense to shop around for a lender that you can work with for that length of time.

Factors to Consider

National home loan lenders are often better sources of funds than local lenders. With a national lender you often find diversity in the products offered as well as advanced funding capability.

While the costs of the loan are important, choosing a mortgage lender is about more than just the money. The lender's reputation is another factor that you should take into account when choosing a home loan lender. The length of time the home loan lender has been in business will give you an indication of their reputation.

You should also check with the Better Business Bureau to see if the lender has any complaints against it. If you are considering a national home loan lender that operates in multiple states, make sure to check the status of that lender with the BBB in other states.

Asking your family and friends for the name of the home loan lender they use is another way to find reputable lenders for your mortgage.

The financial aspect of your decision for a specific mortgage lender should be based on the closing costs and interest rates. When you speak with a home loan lender, ask for details on the closing costs and rates of the loan. Make sure to find out how many points you are being charged. The points are the amount you pay for the loan and are a percentage of the amount you borrow. Your goal is to minimize the extra costs of the loan as much as possible.

Lenders to Avoid

• Those from out of state that you are not familiar with. Unless the home loan lender is a national lender that operates across several states, you should avoid using that particular lender. With a lender from another state you could be subject to fees that you are completely unfamiliar with.

• Home loan lenders that are not in good standing with the Better Business Bureau. It almost goes without saying that if other consumers have had trouble with a particular mortgage lender that you are subject to having the same trouble.

• Home loan Lenders that are strongly recommended by a real estate agent. Be wary if your real estate agent urges you to choose a particular home loan lender. Some agents form alliances with home loan lenders and are compensated when their buyers use a particular lender. Make the decision about your home loan lender based on your own qualifications.

A mortgage is a significant financial undertaking. It is in your best interest to find a lender that provides you with the service you desire at a cost you can afford. If you are suspicious about a particular lender, go with your gut feeling. In nearly all cases, your instincts are correct in telling you not to trust a specific lender.

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