Selecting a mortgage company is one the first steps in buying a home, and it’s an important one. Much of the home buying process hinges on the work performed by the mortgage company. As a buyer, you can essentially choose any lender. However, there are a few considerations to make
when doing so. Here are a few questions that you may want to ask.
What mortgage programs do you offer?
Most mortgage companies offer a wide range of programs. Some may be those generally available on the market (i.e. Fannie Mae, FHA, VA) while others may be special programs offered only by that mortgage company. Additionally, there may be city or state programs offered only through approved lenders. It is important to know which programs your lender can provide and which ones they do not.
How does your team communicate with customers?
Communication during the home buying process is critical, especially when issues arise. Be sure to find out if you will have direct access to a loan officer, loan processor and other members of the team. Some lenders may require digital communication through their online portal or contact through a centralized call center. The communication methods can influence the level of service that you receive.
How much time do you need to process a loan?
Every lender operates a little differently. Some are extremely quick in their procedures while others need a little bit more time. Selecting a lender that can close in 30 days versus one that requires 60+ days is important for you to know ahead of time. It could impact the type of offers that you make or your ability to compete for certain homes that require quick closings.
What are your fees?
You may hear that there are “standard fees” but these truly do vary from one lender to another. For example, one lender may charge $300 for a underwriting fee whereas another may charge $700. When comparing different lenders, be sure to also compare their fees.
How do you handle loan funding?
Funding refers to when the proceeds of your loan are transferred to the closing attorney. Funding is often not thought about unless it presents an issue, at which point it may be too late to do anything about it. Typically, a home purchase is not on record until the loan is funded. If you are closing first thing in the morning but your loan is not funded until the afternoon, then you may not receive keys until the afternoon. This might impact your plans with movers, contractors, etc., so it’s important to know the funding process ahead of time.
The value of local lenders
Having someone that you can meet in person and directly communicate with is extremely helpful. The home buying process can be stressful and working with a local lender can often facilitate resolving issues that arise along the way.
By Suzanne Plewes, RE/MAX Alliance in Loveland. Suzanne Plewes is a broker associate at RE/MAX Alliance. Write to 750 W. Eisenhower Blvd., Loveland, CO 80537, call 970.290.0373 or e-mail [email protected].