Selecting a lender may seem like a daunting task, but it is an undertaking that should not be taken lightly. There is a lot more to selecting the right lender than acquiring the lowest interest rate or the lowest mortgage payment.
So how is one to choose the best lender? A good place to start when beginning your search for the perfect lender is to ask around. A few of the best resources are your professional real estate agent, friends, or co-workers who have recently purchased a home through financing. Contact the lenders who are recommended, choose the lenders that have good reputations, excellent track records, display a high level of competency and are always in communication with you, the borrower. Do your homework, research and review their terms of service, and look and see if that lender has a program that meets your needs and has a track record of actually bringing funds to the table on time so that transactions close.
Once you find a lender that fits your criteria, the next step is in understanding why it is important to select the best lender. Well for one, by getting pre-approval for a home mortgage by a reputable lender, your offer becomes more attractive to the seller. If for example, you as the borrower were to choose an inept or “shady” lender then both the listing agent and the seller may be concerned with your financial resources and situation. In addition, choosing a lender that is not dependable or experienced can cause major issues in regards to closing, i.e. funds were not received in time for closing after the lender assured all parties involved that the funds would be received in a timely manner, dramatically higher closing costs at closing not disclosed prior to the borrower on the ‘Good Faith Estimate’, lender does not return calls especially when it is the day of closing, lender changing the terms of the loan and not notifying the borrower until the day of closing. These are all frightening examples of how imperative it is to get all the facts when selecting the best lender.
Understand the difference between a mortgage lender and a mortgage broker. Mortgage lenders work for a bank or other financial lending institutions, are employees of these institutions who work to sell and process mortgage loans. As a borrower, the lender will take your application and will work to find the loan that meets your requirements. Once approved, the lender will take you from the purchase of your home through the closing process. Mortgage brokers are more like free agents. They are paid a fee to work towards the real estate transaction and work with hundreds of lenders, finding homebuyers and determining the best mortgage for them based on their credit situation. Mortgage brokers can usually find mortgage loans for any type of credit.
Does it make a difference? Know the differences. If a borrower is looking to purchase out-of-state, then a local mortgage broker may assist in finding a lender in another part of the country. A local mortgage lender may not, particularly if it is a small bank that does not have a local branch in the part of the country a borrower is looking to purchase in. Mortgage brokers can also find a lender that will make a loan when a local bank has turned down a loan.
Remember that knowledge is power. By doing your homework in selecting the perfect lender, and understanding your choices and options whether it be with a mortgage lender or mortgage broker, you will find a true professional, one that provides the level of service that you expect, who treats you as a valued customer, and can bring funds to the closing table.
Keith Munsell 
