Q. How do I find the best mortgage lender?

A.  The most important step in the process of finding the right mortgage lender is to do plenty of research.  Unfortunately, most consumers will spend more time shopping and comparing the price of a new television set than they do shopping for a mortgage lender. 

When shopping for the best mortgage lender is not only important to shop around and compare mortgage rates and costs, it is equally important to investigate the mortgage lender and their services.  It’s important that you find a mortgage lender who will work with you to meet your needs and who you feel comfortable with and gives you a feeling of trust.  This will entail comparing rates, services and competence.

It’s not that difficult to choose a good mortgage lender, but you do have to be informed and know what you are looking for in a mortgage lender.  In order to shop and compare mortgage lenders, you need to fully understand what you are searching for not what they are selling.  In order to understand the product, a prospective home loan borrower has to learn about the mortgage loans available, the average mortgage rates, the costs and the terminology involved in the mortgage loan process.  With the knowledge of how the mortgage loan decision making process works, a mortgage shopper can better compare mortgage lenders and question the services and products offered.  

Above everything else, do your homework before the application process begins.  To find the right mortgage lender a consumer will have to question the mortgage lender and loan officer and this will be difficult to do without some understanding of how a mortgage loan is originated, processes and closed. 

Once you, as the potential home loan borrower, understand the mortgage loan types and the process involved, its time to quiz the mortgage lender and mortgage loan officers.  The first thing to find out is how knowledgeable the mortgage loan officer is about the home loan options and equally important, how well they explain the process and any potential pitfalls to a smooth home loan closing.  The mortgage lender or mortgage loan officer should explain the mortgage rate lock process, the mortgage payments, the loan term, when and if you can refinance again and more.

Which mortgage lender has the best mortgage rate will certainly be a consideration.  Of course, it is important to discuss mortgage rates and closing costs.  This is a big ticket item and the mortgage rate can have a significant impact on the total costs of the loan.  Comparing mortgage rates fortunately is fairly straight forward process. 

Go online and check the prevailing mortgage rates in your area for the home loan product you are most interested in.  Use these mortgage rates as a starting point to compare the mortgage rates of lenders you call and measure how competitive their mortgage rates really are.  Don’t choose a mortgage lender based on mortgage rate alone.  Make sure the mortgage lender is competitive with their mortgage rates but be sure to investigate the costs and service as well.

Comparing closing costs can sometimes get fishier.  Some mortgage loan officers remain intentionally vague about the total closing costs.  Other mortgage lenders employ loan officers that just don’t know that much about what they sell.  In these cases it may be wise to move on.  A representative of any mortgage lender should be able to explain the mortgage costs with great detail.  That means they should explain any origination points, the costs of the appraisal, the title insurance costs, the cost for processing, the credit report, the tax service fee and any other fees the mortgage lender will be charging. 

Not only should a good mortgage lender explain these costs, they should be able to explain what they are and why you are being charged the corresponding fee.  Once you have chosen your mortgage lender and submitted a home loan application, get a Good Faith Estimate in writing itemizing approximate mortgage costs and fees.  Pay close attention to all the figures on the Good Faith Estimate.

You should know, up front, how the mortgage lender will evaluate your application.   Have the mortgage lender explain the mortgage loan process and the how they come to approve your home loan request all the way up to how and when they set up the mortgage loan closing or settlement.  When you speak with the mortgage lender they should explain the automated underwriting process, the verification process, the documents needed by you to support the down payment and your income as well as how long this process should takes. 

While the mortgage lender briefly explains the process, find out how accessible they will be while your home loan application is being evaluated and underwritten.  With all the transactions now taking place on line including mortgage origination’s, a face to face application or consultation is not necessary with a mortgage lender but you should at least be able to contact your loan officer by phone or email regularly.  Some customers can be annoying but the job as the mortgage loan officer to help you get a home loan.  You want to be assured it will be easy for you to monitor the status of your mortgage loan application and be able to ask questions along the way.

A final step should be to ask for references.  As good mortgage loan officer should be able to immediately provide references of satisfied customer’s even customers that they are presently working with. 

In a nutshell, to choose a good mortgage lender you want to research the products they offer and the mortgage rate, the level of service in handling a home loan application from beginning to end and the reputation of the mortgage lender.  Mortgage lenders who understand mortgage rates and costs and the whole loan process are most certainly going to be a very knowledgeable and resourceful mortgage loan officer who has not merely a salesman.  Be sure to choose a company that gives helpful advice and that makes you feel comfortable.