Tips for Shopping Mortgage Lenders

By Stephanie Cochard

If only selecting a mortgage lender was as easy as picking out a new cactus. All you’d have to do is find the perfect window for display, read up on its water and light requirements, and then take your tiny prize home to enjoy its budding flowers. When it comes to shopping for a mortgage, the situation can get a bit pricklier - but the process doesn’t need to leave a thorn in your side.

Selecting a mortgage lender is a decision that will affect your life for years to come and deserves the same care and research reserved for selecting the home itself. However, many people don’t put the same time and energy into choosing the company that will handle their loan, which will likely represent one of the largest financial transactions they will make in their lifetime. Here are a few tips to keep in mind when shopping for a mortgage lender that will make your life easier and protect your investment:

1. Review the basics. It’s important to know what you’re getting yourself into when it comes to getting a home loan. Before starting your search for a lender, re-familiarize yourself with the mortgage process and review basic concepts and key terms about home buying and financing. You don’t need to become an expert, but starting with a little background knowledge will help you make well-informed decisions and help you ask the right questions.

2. Realize mortgage lenders aren’t one-size-fit-all. Different lenders specialize in different loan products and during your research you may come across a loan that has terms that seem favorable to your financial situation. For example, if you are thinking an FHA loan makes sense for you because of the lower down payment, choose a lender that focuses on those types of loans to get the most relevant information and advice.

3. Phone a friend. Or text. Or email. Or Facebook message. Or send a carrier pigeon. Point is, tap your network and ask how their experience was with their lender. Friends will tell you like it is, even down to their thoughts on your new cactus. Listen to their experiences and pay attention to the feedback of those you trust.

4. Test the first contact. First impressions matter. If you inquired with a lender, notice their demeanor and turnaround time it takes to get a response. Do you have to wait to hear back for an unreasonable amount of time? Do they seem unwilling to help you start the process? Trust your instincts and pay attention to their front line of customer service, as it could be an indicator of the kind of treatment you will receive during the life of the loan.  

5. Look for a partner. A reputable mortgage lender who values your experience will take the time to educate you and keep you informed throughout the process. Before committing, make sure they have volunteered information to you willingly. They should help you determine how much you can afford, brief you on any applicable rates and fees, educate you on loan products available, and inform you of other mortgage terms and concepts you should be aware of as a new customer.

Your lender will be your partner for the long-term, and you want to feel like they have your back and will keep you confident and informed throughout the entire process. Make sure you are comfortable that you’ve found a partner to guide you every step of the way.