Buying a house is likely the most significant purchase anyone ever makes. Before jumping into the housing market, though, there are important steps that you need to take to ensure the mortgage lender company you choose is right for your needs and your bank account. Arm yourself with this important information before you get started.
The first thing you want to do is to check your credit record and make sure there are not any errors, because home mortgage lenders will check all of that, too. This will help you upfront to know if any potential obstacles are present on your credit report and give you the opportunity to correct them or discuss them more efficiently with potential lenders.
Many potential home buyers who thought that their records were spotless may find themselves with a less-than-stellar credit report. Finding those mistakes in advance and clearing them up with the appropriate agencies will save time in the long run. Even those without a positive history can work to re-establish credit before approaching a bank for a home loan.
You should plan on approaching a minimum of three mortgage lenders for your home loan. Shopping around will give you critical information that will allow you to make comparisons between each of them. First, you can compare offers for the same kind of loan product, and you can identify any differences in fees, mortgage lender rates, price points and the way service is provided.
Second, your comparison will reveal any inconsistencies in a particular lender’s practices. For instance, one could tell you that certain fees are mandatory, when in fact that might not be the case. There is a whole list of possible fees that are charged, including document preparation, document shipping, loan application fee and credit report fees. Almost all are negotiable. Consider making a chart comparing the various charges your best mortgage lenders specify, and using that information as a starting point for negotiations.
The competition in the mortgage industry is tremendous with more than 7,000 lenders along with thousands of brokers. You don’t get the advantage of that competition unless you force them to compete against each other. Making them compete is going to be good for you. Armed with information detailing your own credit history and the results of your comparison shopping, you will have an advantage in what can be an intimidating process. Just remember that a lender does not make a dime unless they get your business, so they are going to try to do what they can to make that happen. When you arm yourself with this information you will have a more powerful negotiating arsenal choosing a mortgage lender, but you have to be willing to use it.