Top 5 Tips For Choosing The Perfect Mortgage Lender

One of the most monumental moments in many people’s lives is buying a home. It is also one of the most expensive purchases most people ever make and often takes many years to pay off. Thankfully, mortgages are available. The ideal situation with a mortgage is that you find a lender who is happy to assist you and who finds the best possible loan with the lowest interest rate possible. You will sign all the required paperwork and begin paying off your loan.

Sadly, this isn’t always the case for both first-time homebuyers and veterans to the process. Many of the potential issues with mortgage lenders, such as exorbitant hidden fees or high interest rates, can all be avoided by taking time to research your local lenders.
There are many things to consider when looking for a mortgage lender. Here are five tips that will greatly improve the home financing process:

1. Reduce Your Debt and Increase Your Credit Score As Much As Possible

The first thing to keep in mind is that your loan officer is there to help you succeed in getting a mortgage loan. Giving him/her something to work with and being honest and up-front with your loan officer will truly improve the entire process.

A positive credit history and having low monthly payments are two great steps in the right direction. It goes without saying that most people get a mortgage on their home because they don’t have access to enough funds to cover the entire purchase in one lump sum. In fact, the typical adult American has roughly $15,500 of just credit card debt according to a study on NerdWallet. Those minimum monthly payments all add up and will reduce what you are able to afford when going out to get financing for a new home.

In preparation for getting a mortgage loan, you should take the time to reduce your current monthly debt as much as possible. When you apply for a mortgage, your debt will be examined and high debt can cause you to be analyzed as a potential risk for the lender. Though you probably won’ be turned away, you might not get as high a loan as you are hoping for or will have to pay a higher interest rate.

Just like debt, your credit score will also be examined. A low credit score or negative history will show lenders that you are a possible risk; and, therefore, you will have to pay a higher interest rate. A high credit score tells lenders that you are trustworthy, and you’ll probably get more favorable loan terms and a lower interest rate.

Unfortunately no credit history is sometimes worse than negative credit history. Many mortgage lenders will turn away someone with no history since the individual has not proven his/her ability to repay. Starting your credit history from scratch and improving a bad credit scores is done in similar ways. There is a ton of information on tricks to increasing your credit score; exercise caution though as many of these tricks are only temporary and may end up hurting you rather than helping. Always speak with a reputable mortgage professional and discuss any strategies you might undertake related to credit improvement or repair.

If you have no idea what your credit score is, don’t worry. You are entitled to one free credit report every 12 months. Credit Karma will allow you to check your score for free.

2. Shop Around for the Best Rate and Speak with Multiple Lenders

If you want to get the best deal possible you need to shop around and get quotes. Lenders may all have different interest rates and costs. Getting a lower interest rate can save you tens of thousands of dollars in the end.

Watching the charges you are incurring for that interest rate and for the loan are also important. Often, lenders will charge you a fee for a lower interest rate; and this could end up costing you more in the end.

Be skeptical of online rates, as these are often reserved for only the lenders’ most highly qualified clients and are used as bait to attract people. Getting together with a local loan officer in person will allow you to ask questions, discuss the terms, and review the numbers and options available to you. This will also allow you to get an idea of how helpful the lender is. An in-person meeting can often accomplish much more and save a considerable amount of time than many phone calls back and forth.

Some good questions to ask include:

• Will my loan be processed and underwritten locally?

• Will you be funding my loan directly?

• Will you be able to approve my loan in time?

• What will the closing costs be?

• Can I have a Good Faith Estimate now?

• Do you offer special loan programs for my situation and needs?

• Can you explain your fees and how you will earn an income from my loan?

• Do you work as a loan officer or loan broker?

• Can you tell me your experience and any certifications as a loan officer?

If you find the loan officer is impolite, impatient or skirts around your questions, be skeptical. It can’t be stressed enough that taking the time to find the right lender will save you money and frustration in the long run.

3. Ask Your Realtor and Other Trusted Sources for Referrals

Word-of-mouth referrals can be extremely helpful when searching for a mortgage lender. Naturally, asking family and friends is the easiest option but don’t forget about asking a reputable real estate agent. Remember to take the time to follow step 2 above. Just because a family member got an excellent rate and was pleased with a lender’s customer service doesn’t mean you will be.

Before calling up the recommended lender, it’s a good idea to ask pertinent questions of the person who recommended the loan officer, such as:

• Did you get the rate you were promised during the consultation?

• Were you charged any fees that were not discussed initially?

• How was the customer service? Was the loan officer helpful and quick to communicate?

• Were you unhappy with anything or wish the loan officer or lender went about the process differently?

It is also a good idea to talk to your Realtor about lenders before you start looking at properties. The relationship between a realtor and a mortgage lender is mutually beneficial and receiving a professional referral from a real estate agent may gain you additional attention from your lender.

4. Don’t Blindly Go with In-House Lenders

Some real estate agents will have an in-house mortgage lender available for their clients. An in-house lender can be a great choice, but don’t make the mistake of being talked into choosing them just because it’s easy.

The danger of going with an in-house lender without careful consideration is the same as going with any other lender without doing your research. You can easily agree to unfavorable interest rates, high fees, or terms, just because it was easier to walk down the hall and hire the in-house lender. If you do find that the in-house lender offers good terms, ask them all the same types of questions you would with independent lenders outlined in tip #2.

5. Investigate Potential Lender’s Reputations and Check for Online Reviews

Before meeting with potential lenders, or even after if you’ve already met, it is important to ensure that the business is legitimate and known for their ability to find the best loans for their clients prior to signing any contracts. There are a several ways to do this and thankfully having access to the Internet simplifies it.

First, check with the BBB (Better Business Bureau) to see ratings, reviews, and complaints of the lender in question. After that you can do a Google search, such as “(the mortgage lender) reviews” to see what their clients have to say.
Visiting their place of business to meet can also give you a good indication of their stability and professionalism.
Remember, getting a mortgage doesn’t have to be an unduly stressful period in your life. Taking the time to research lenders and gather quotes isn’t just important for saving money but also to make the entire process easier and simplified. Buying a new house is a huge step; and knowing that your mortgage is under control, affordable and that you have a loan officer to help, can make all the difference.

For more information, please feel free to contact John Barry, Loan Simple, Inc., 303-649-1245 Ext 108. Email:, Website:

Great Living in Colorado

Keller Williams Realty  DTC, 6300 S. Syracuse Way Suite 150, Centennial, CO 80111

Jim Holmes : 303-475-7249
Patrick Panzarino : 303-956-2949