If you are in the process of applying for a mortgage or refinancing your existing mortgage, how do you know which mortgage lender to choose? Many mortgage lenders have conflicting advertisements and even advertise interest rates that don’t make sense. For many people their mortgage is the single most important investment they make; choosing the wrong mortgage lender could cost you thousands of dollars. Here are several tips to help you choose the right mortgage company.
1. Pay Attention to Interest Rates
Mortgage companies often play games with their interest rates. Some mortgages come with introductory interest rates cleverly disguised as the actual loan rate. Watch out for special promotions; if an interest rate seems too low to be true, it probably is. It is important to compare interest rates when shopping for a mortgage; however, interest rates are not the only factor you should consider. Many homebuyers make the mistake of overlooking lender fees and closing costs. If you do this you could easily overpay thousands of dollars for your mortgage.
2. Compare All Mortgage Lender Fees
When comparing mortgage offers examine all of the fees presented on the Good Faith Estimate. The Good Faith Estimate outlines all of the fees and closing costs along with who they are being paid to. Make sure you compare loan offers from a variety of mortgage lenders so you will know what reasonable fees are. Shady mortgage lenders often try to disguise their lender fees. Carefully shop or you will overpay for your mortgage.
3. Be Mindful of Customer Service
Some companies treat their customers better than others. A mortgage company that gives you a low interest rate but horrible customer service might not be the best deal out there. Customer service is important; however, mortgage companies frequently buy and sell mortgage debt. The mortgage lender you have today might not be your mortgage lender tomorrow.
Choosing a mortgage can be an intimidating task; no one wants to overpay for anything, including mortgage loans. If you take the time to do your homework and research mortgage lenders you will avoid making many costly mortgage mistakes. You can learn more about choosing the best mortgage while avoiding common mistakes by registering for our free mortgage guidebook: “Five Things You Need to Know about Your Mortgage.”
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
