April 22, 2019 at 11:22am | Phil Aitken
Finding your dream home begins with finding the right financial institution best suited to meet your needs when it comes to securing a mortgage.  Factors such as interest rates, fees, length of time it will take to obtain pre-approval and terminology all come into play when shopping for a mortgage.


The Aitken Home Teamoffers five tips for finding a lender that will work for you:

1. Know your financial situation.

There is no "one-size-fits-all" with mortgage products as everyone's budget is different.  There are no two financial situations which are identical.  You need to know exactly where you stand financially; what you can afford and what will cause you to get in over your head.  Larger loans are best approached by lenders which specialize in jumbo loans.  Jumbo loans are loans in excess of $424,100.  If you are an average, middle class home buyer and you are not looking to purchase in a "high-rent" zip code such as Los Angeles, Manhattan or Nantucket, for example, visit a lender who is known to offer competitive rates and who is quick with preapprovals.  If you do not already have a good handle on your financial situation, an experienced lender will tell you exactly what you can comfortable afford versus that which will stretch your budget beyond normal limits.  
Related: "Spring Mortgage Rates on the Rise"

2. Know that for which you are able to qualify.

Conventional homes are most common among buyers as they tend to offer lower interest rates.  In order to obtain such a loan, you must meet criteria such as being able to afford a 5%-20% down payment, a 620 or higher credit score and a debt-to-income ratio no higher than 43% - to name a few. 

3. Know your options.

Perhaps you already know that you cannot qualify for a conventional loan.  If this is the case, you need to know your options as there are likely other loans for which you may qualify such as FHA, VA or USDA.  In most cases, such loans have a more "relaxed" criteria which buyers are expected to meet: lower credit score, lower down payment requirement, etc. 

4. Know if you are willing to farm out the work.

Online mortgage are becoming quite popular, especially with millennial home shoppers.  Online mortgages are not suited to everyone and they do not offer face-to-face service nor are they necessarily acquainted with the market in which you are looking to purchase.  This is where it becomes crucial to understand your needs and exactly what you are looking for in a lender.  Consider the possibility of hiring someone to research this prospect for you.
Related: "Is Your Pre-Approval Still Good?"

5. Know your size.

"Go big or go home" doesn't apply in all facets of life.  In fact, this mantra could be to your detriment when it comes to lender shopping.  Know if you'd prefer a small lender such as a credit union or if you are more comfortable with a larger entity such as Wells Fargo.  Personal service might be more "personal" with a smaller lender.  A larger company might make you feel like a number rather than a client.  It boil down to understanding your preferences.  If you want to move quickly, a larger company might be to your benefit as such companies retain in-house underwriters, attorneys and processors who can work through your application quickly.  

At the end of the day, research is key. Make a list of of preferences and weigh the pros and cons between utilizing the services of a smaller company versus a larger, nationally-known lender.

For more information, contact The Aitken Home Team today!

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