Financing the purchase of a house from personal savings might mean a mighty long wait for the end of rent-paying. This reason is why most homeowners in the US today are using mortgages. If you want to buy a house and don't have enough in your savings account, you will want to hook up with a lender. But how do you know which lender to choose from the myriads out there? Here are some key pointers:
Interest rate
The interest rate should be the deal breaker when choosing a lender. Take time to compare the rates of as many lenders as you can. You will find several tools online that can help you do this quickly. Some mortgage companies will offer you a loan with a down payment of as little as 3% of the purchase price, but they make up for this with a higher interest rate.
Speed
With some lenders, you may have to wait months before your approval sees the light of day. Such lenders will typically require you to fill a plethora of forms when applying for your mortgage and support your application with a ton of documents. Many innovative lenders have come up with platforms that allow you to upload documents securely and complete the entire application process online.
Bad credit
For some lenders, especially traditional banks, a bad FICO score is an automatic "no". Others will still extend financing to you even if you have a credit rating below 600. However, perhaps you should keep in mind that such lenders will make up for the risk they're taking on with a higher interest rate.
Reputation
You may have a referral to a lender from relatives or colleagues, but before you begin your application with them, do a bit of digging of your own. What reviews come up when you search on independent online sources? Consumers Advocate has a listing of top-rated lenders, as do many other referral sites.
Customer service
How quickly does the lender respond to queries, and do they provide comprehensive feedback? If you would rather talk or meet your mortgage officer during the application process, is that option available? Some companies operate entirely online, with no brick-and-mortar presence. If you would rather have that personal touch, you could be better off with a traditional bank.
Eileen is a Licensed Real Estate Salesperson and has been in the industry since 2004. Her experience in home sales range from a $4,000,000 single family home to a $100,000 Co-op. She covers both Westchester and Putnam County and works with both buyers and sellers. "My love for Westchester and particularly the Hudson River Valley is one of the many reasons why I enjoy working in real estate". She is a lifelong resident of Westchester County. She grew up in Tarrytown and moved to Briarcliff Manor where she raised her family. She received her MPA from Pace University and worked many years in the Human Resources field. She held the title of Vice President of HR for the largest teaching hospital in Westchester and Director of Classification and Compensation for one of the largest employers in Westchester County. After a successful HR career, Eileen decided to retire to make a full time commitment to her real estate clients. Outside of work you can find Eileen on the Tennis, Platform, or Pickleball Court along with Hiking in Westchester or the surrounding counties.