Hiring a good mortgage lender can make buying a house a pleasant and smooth deal, while using the wrong one can even result in you losing your dream home. There are several things to consider before signing on a lender to ensure positive results.
Functions of a mortgage lender
It is the job of mortgage lenders to find good interest rates and lock it in for you. They are also responsible for closing the deal on a house in time. Once a house is bid for, there is usually a time frame within which the deal needs to be closed. A lender charges a bunch of different fees, like closing fees and administrative fees for instance. Because these are determined by him, it is also is his hands to do away with any of them, which can save you a lot of money.
Considerations while hiring a mortgage lender
- Terms and conditions: The terms and conditions put forth by the lender should be simple and easy to understand. They should not be highly technical, which can confuse the borrower. Although some parts of the agreement will have to be technical, the lender should explain these to you in person. A mortgage lender who is sugar coating details and proving vague, sketchy answers should be reconsidered. They should be clear about all the terms and conditions and should not leave any matters unaddressed.
- Low interest rates: The interest rate is the amount that will be added to the mortgage balance every month, until the loan in completely repaid. Having an interest rate that is high can prove very expensive eventually. It is important to look around and find the lowest interest rate that will end up saving a lot of money eventually and also be lighter on your pocket every month.
- Lender reviews: It is important to perform sufficient research on your lender. Other client's reviews can give useful insights. The local chamber of commerce or other such bodies can be approached to find out if any complaints have been lodged against your lender. Friends and relatives can also be approached for a second opinion.
- Low fees: Mortgages can involve a lot of different kinds of fees. The most common ones are the opening and closing fees. If you can get a mortgage lender who does not charge some of these fees, it can add up to a lot of money being saved. It is important to discuss all fees and any lenders who are unclear about their fees should be avoided.
- Types of mortgages: There are various types of mortgages in the market. It is important to get a good understanding of all the different types before settling for one. Apart for taking advice from your lender, you should research these types on your own as well. Some of the types of mortgages are interest-only mortgages, variable interest mortgages and balloon mortgages. You should make sure you trust your mortgage lender before relying completely on his advice if you plan on doing so at all.