How to Pick a "Good" Mortgage Lender

Learn what makes a good lender and how to pick the best one for you

How to pick a lender

Welcome to the world of mortgage lending, a realm where dreams of homeownership transform into reality. As a Wisconsin real estate agent, I've had the privilege of guiding numerous individuals and families through the, frankly, oftentimes stress-inducing landscape of securing a mortgage. The realm of mortgages can be a daunting task, especially if all you want is to be able to buy a house! Not all of us have a longing to understand interest rates and  (at times) complicated math... in fact, if you do have that longing, please contact me. I don't even need to work with you, I just want to pick at your brain to find out how you find joy in this at-the-surface-soul-sucking experience... haha.

BUT, with that said, I do understand the importance of finding the right lender to make this journey as smooth as possible. In this guide, I bring forth not only my professional expertise but also the insights gained from witnessing the diverse experiences of my clients. From the bustling urban landscapes to the serene rural settings of Wisconsin, I've seen the intricacies of mortgage lending unfold. The path to homeownership awaits, and together, we'll make every step a confident stride.

Explore the nuances of choosing the perfect mortgage lender, avoiding pitfalls, and ultimately turning the key to your new home.

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Choosing the right mortgage lender is a critical step in the home buying process. Here are 14 guidelines to help you pick a good mortgage lender:

1. Research and Compare:

- Start by researching various lenders in your area. Consider both traditional banks, credit unions, and other lenders. Sometimes online lenders can work, but be weary of them! They may offer a simple process, but oftentimes the communication from them can be less than ideal, especially when dealing with something time sensitive.

- Compare interest rates, loan terms, and fees from multiple lenders to get a comprehensive view of your options.

2. Check Reviews and Testimonials:

- Look for customer reviews and testimonials online to get insights into the experiences of others who have worked with the lender.

- Pay attention to both positive and negative reviews to understand potential strengths and weaknesses.

3. Ask for Recommendations:

- Seek recommendations from friends, family, colleagues, or your real estate agent. Personal referrals can provide valuable insights and help you identify reputable lenders. Most of the time family or friends can give you better insight than strangers online. Real estate agents also should know the best lenders available for your situation. Reach out to one today.

4. Evaluate Customer Service:

- Pay attention to the responsiveness and professionalism of the lender's customer service. A lender who is communicative and helpful throughout the whole process is essential. I have found that the way they treat your earliest questions will signal how they will treat you once you're under contract on a home.

5. Understand Loan Options:

- Choose a lender that offers a variety of loan options to meet your specific needs. This includes fixed-rate mortgages, adjustable-rate mortgages, FHA loans, VA loans, etc.

6. Consider Local Knowledge:

- If possible, choose a lender who is familiar with the local real estate market. Local lenders may have a better understanding of regional trends and potential challenges. As a Milwaukee-area real estate agent, I always suggest going local for lending. It is one of the only businesses that I feel really matters if you go local opposed to online.

7. Check for Pre-Approval Process:

- Evaluate the lender's pre-approval process. A smooth and efficient pre-approval process can be an indicator of the overall lending experience.

8. Transparency in Fees:

- A good lender is transparent about all associated fees and costs. Request a Loan Estimate, which breaks down the costs of the loan, including closing costs and other fees.

9. Financial Stability of the Lender:

- Consider the financial stability and reputation of the lender. A lender with a strong financial standing is more likely to provide consistent and reliable services.

10. Accessibility and Technology:

- Evaluate the accessibility of the lender. While you may want to be weary of some online applications/digital processes, it also can be a sign of which lenders put value into the convenience of busy homebuyers.

11. Check for Special Programs:

- Inquire about any special programs or incentives offered by the lender, especially if you are a first-time homebuyer or qualify for specific government-backed loan programs.

12. Get Multiple Quotes:

- Don't hesitate to get quotes from multiple reliable lenders. This can help you negotiate better terms and find the most competitive offer. Lending for Real Estate is something you really want to take your time on, since your mortgage could dictate a large portion of your life.

13. Review Terms and Conditions:

- Carefully review the terms and conditions of any loan agreement. Understand the interest rate, loan duration, prepayment penalties, and any other relevant terms. Don't get locked into something you don't fully understand! A big part of lending is salesmenship, and if you are uncomfortable or unsure of something, investigate!

14. Licensing and Credentials:

- Ensure that the lender is licensed and accredited. You can check with your state's regulatory agency or mortgage licensing system for this information. In most cases, this information will be very easy to find, even on business cards or flyers.

Pick a Good Lender with Confidence!

Taking the time to thoroughly research and compare lenders will help you make an informed decision and choose a mortgage lender that aligns with your financial goals and homeownership needs. If you need help understanding the lending process, please reach out to me or comment on this post below. Happy lending, and hopefully this quick guide made picking a lender easier, stress-free, and a process that you can (almost ;) ) look forward to!