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With interest rates rising and the housing market showing no signs of cooling, you, like many across the United States, could be feeling the pressure to purchase a home. And when you're making a large financial decision, it's important to be working with professionals you can trust.
Whether you hope to buy an existing home or plan to build new, If you're still shopping around for the right mortgage, there are a few things you should always look for in a lender.
A stellar reputation
What your mom told you as a teenager still holds true: reputation matters – especially when you're dealing with financial institutions. And when you're purchasing a home – the largest investment most Americans will ever make – you want to be working with a company you can trust.
When vetting a potential lender, Nerd Wallet recommends an online search to learn whether the lender has had any disciplinary actions taken against it and to read any posted reviews. Keep in mind that all legitimate lenders must register with the state, so you can check the Utah Department of Commerce Division of Real Estate to make sure a lender is licensed and to see if they have had any disciplinary actions.
6 myths about building a home that just aren't true
To buy or to build? That is the question that many prospective homeowners grapple with as they search for a new place to live.Local expertise
Both large and small lenders can get you a mortgage but finding one with local expertise can prove advantageous when you're purchasing a home – particularly in today's competitive markets. A lender with specific knowledge of your real estate market can make decisions a larger, national lender might not.
For example, the local company may be comfortable underwriting specific property types within your market because of its background knowledge, while a national lender might be limited to more cookie-cutter loan options.
Writing for Realtor.com, Angela Colley reports local lenders might be more willing to work with someone who is self-employed or needs to raise their credit score.
Options, options, options
Speaking of cookie-cutter loan options, you'll want to find a lender that can provide a number of loan products and programs. Depending on the home you've selected, your income level, credit, status as a first-time or repeat homebuyer and many other circumstances, you may qualify for any number of mortgage programs.
To make sure you choose the best for your situation, you'll want to have a number of loan options – and a lender that understands them all.
Responsiveness
When it comes to buying a home, things can move quickly – particularly in today's market. According to Zillow, homes are spending less time on the market than in years past, creating a sense of urgency for buyers hoping to secure a new home.
When you need to make quick decisions, it's important to have a lender you know is responsive. If you find it difficult to get a returned phone call or email from a mortgage lender or broker, that could be a sign it's not the right fit.
Your interests at heart
It might sound trite, but when you're making a huge financial decision, you want to make sure your support team has your best interests in mind. That's why it's important to work with a lender that wants to find the best loan product for you and your family – not the easiest or most lucrative option for the lender.
If you're feeling pressured into one loan product over another – particularly if it doesn't feel quite right to you – it might be a good idea to keep looking for a lender.
Honest rates
Loan documents can be difficult to understand – particularly for first-time homebuyers. That's why it's critical to work with a lender that is open and honest about rates and fees – and one that will take the time to explain them to you.
Fortunately, the Consumer Financial Protection Bureau requires lenders to furnish loan estimates, which outline the terms of a particular loan, including your monthly principal and interest payment, your interest rate and the amount of interest you'll pay over the life of the loan. If you're working with a lender that's opaque about rates and fees, that's a good sign to move on.
Competitive rates
When you're buying a home, interest rates are king – particularly today, when both home prices and interest rates are on the rise. For that reason, you'll want a lender who can compete with the lowest rates around. Keep in mind that even a slightly lower interest rate can save you hundreds each month on your mortgage payment, so it can quite literally pay to shop around.
If you want to buy a new home but don't know where to start, the experts at Woodside Homes can help you work through the process. Woodside has lenders on hand to provide options and a great customer experience, including navigating the financials.
From Ogden to Spanish Fork, Woodside Homes has a range of communities and home models to fit every need and budget. Contact them today to find a new home that is perfect for you.
