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Step 3: Which Mortgage Lender? Why me of course. Ask me why.
Most of the home-buyers take a mortgage from a Mortgage Lender (which can be a Bank that offers mortgages). Some of the important criteria that you should consider while selecting a mortgage company are:
Compare Costs: Different mortgage companies offer different products, and it generally becomes difficult to compare costs. Don't pick a mortgage company solely on the basis that it has the lowest closing costs. Trying to save $100 up front and going with the wrong firm could result in costing you $100's at closing. Stay clear of gimmicks such as free TV's or a free appraisal. Remember, nothing is free.
Mortgage Rate: Compare rates of different Mortgage companies. Most of the lenders in a geographic area offer similar rates. A lower rate means a lower mortgage if all the other parameters are same. If a company quotes a rate that is .25% or more lower than the average mortgage company, steer clear it is probably a come on. For most loans lenders ultimately go to the same source for their money.
Closing Cost: Get a breakdown of all the possible Closing Costs. The lender should be able to offer you a detailed breakdown of the potential costs called a 'Good Faith Estimate'.
Fees: Different lenders have different Fee structures. Some lenders offer discounts for first time home-buyers and discounts for employees of some companies (from where they get bulk business).
Closing Date: Ask the lender:
If they would be able to close the loan when you want to
Which day of the month would they close the loan
Location of closing.
Servicing: Ask how they would service the mortgage. The mortgage may be sold on the secondary market.
Number of years in Business: This will give you some sense of their experience and commitment in the business.
Mortgage Agent's service: It is important that the agent you interact with is able to offer you professional service, is sensitive to your needs and is thorough with documentation.
Location/Convenience: People generally take mortgage loans from lenders who are geographically in the same area as they are. Therefore this is another important criteria to consider.
Other factors: Plus some other factors of importance to your particular case.
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