If you want to get a home loan or help when refinancing, it would be wise to use online mortgage lenders. They offer the lowest interest rates and always have a huge variety of loan programs. Buying property is a huge commitment for any person and mortgages usually last longer than ten years. This means that if you choose the wrong lender or mortgage type, you might end up losing your home in the long-run.
Traditionally most people go to a face to face appointment with a mortgage broker. Finding a mortgage is a big financial decision and one which involves a lot of trust with the person you’re dealing with. Therefore, many people find comfort in knowing they are being taken care of by a face they know and can see.
However, with people’s lives being transformed online more and more every day, big financial decisions and transactions are less intimidating than they once were. This is especially true with review systems such as TrustPilot which provide public feedback from verified customers. So the internet is much more open in terms of service quality than it once was.
Below are six tips on how to find and select a mortgage broker.
Research Brokers Online
The internet has transformed the mortgage and real estate industry at large in positive and negative ways. One big mistake home buyers make is believing that all online mortgage calculators are always 100% accurate.
However, the internet has also done a great job in helping people find mortgage brokers online. All they have to do is search for potential companies. You will get numerous review based websites designed for consumers looking for mortgage lenders. Carrying out a simple search online can offer you important information about a company that is posted by their previous clients as mentioned above.
Don’t be afraid to ask for mortgage advice as well as quotes from online brokers. They are just like any face to face operation and understand that it’s not all straight down to business. You should build up trust in them and gauge their level of expertise before going ahead with any transactions.
Ignore Unsolicited Advertisements
There are some lenders who advertise unreal rates that fail to reflect the situation in the current mortgage market. Note that the market keeps on changing. You should not pay attention to any unsolicited advertisement that you come across whether in your email, leaflet or voicemail. The decision to select a mortgage lender should always be yours; not prompted by brokers or lenders.
In fact it’s against regulations to offer promotional rates which can’t be honoured. So if you find this in practice you may want to report the offending company.
Schedule Interviews with at Least Three Brokers
After going through reviews or getting referrals and recommendations, the next step is calling and scheduling a number of interviews with potential brokers. You should try to schedule these interviews as close to each other as possible. Ideally, they should all take place within a week.
Prepare a list of questions that you look forward to asking and get all the important information from them. For better comparison, come up with similar questions for the different lenders. This will give you an even playing field to compare potential finance companies on.
Ask about the Application Process
Most brokers prefer to offer online platforms to their clients when applying for mortgage loans. Ensure that you ask about the closing times, the required documents, and specific requirements such as credit score and down payment. Also, avoid applying for many different loans over some time as this might ruin your credit score if the application takes longer than 30 days.
Enquire About Rates, Fees, and Points
Before you can complete the application with the lender, ensure you know the exact fees they will charge you. There are numerous costs associated with buying a home. Most of them are associated directly with the lender you choose to do business with.
Your ultimate goal should be getting the lowest interest rates. Also, check with the lender whether it makes sense to buy points to lower your rate. If you decide to buy points, you will be paying some interest beforehand to get a lower rate on your mortgage. Remember that a mortgage principal and interest payments are not the only costs you might incur. Ask about any other transaction fees involved beforehand.
Ask About Poor or Low Credit Scores
A low credit score doesn’t disqualify you from getting a mortgage loan. However, you might be required to pay a premium upfront. If you choose to be open about your credit score, the lender will be in a position to offer you better agreements. Ask about loans tailored to people with low credit too.