8 Tips for Choosing the Best Mortgage Loan
First of all, congratulations on buying a new home. Finding the best mortgage loan for your needs means finding more than just the lowest interest rate. You want a mortgage lender you can trust and one that will provide you with excellent customer service. Remember, that’s what credit unions do best. Credit unions are not-for-profit financial institutions that exist solely to serve the needs of their members. A local credit union, like Benchmark Federal Credit Union, should always be at the top of your search list when looking for a mortgage loan. Before you begin your search, we advise you to check your credit score to make sure it’s in good shape. If not, start working on getting there. The better the score, the better the rate you will qualify for.
Tips for Finding the Right Mortgage Loan for You
- Your first step is getting an idea of how much you can afford. Take a look at your budget and determine a monthly payment that will fit in your budget. Keep in mind the other monthly expenses that will come with a new home, such as taxes, homeowner’s insurance, utilities, and other expenses.
- Begin searching for lenders. There are many different mortgage lenders out there. From credit unions and banks to online lenders and independents. You may immediately get confused when you see certain terms, such as a broker, when searching for a mortgage lender. We believe it’s always best to go directly to the source – a mortgage lender.
- Select several lenders to begin comparison shopping. Never settle on the first lender you speak to. Make a list of those mortgage lenders you’d like to speak to. Again, we encourage you to include a local credit union in your mortgage search and for comparison. You may also want to ask for recommendations from friends and relatives.
- Look for a mortgage loan with competitive rates and terms. Once you develop a list of mortgage lenders, you can begin by researching their current mortgage rates online. Compare fixed and adjustable rates and be sure you understand that adjustable rates can and do increase. You want to start with those with competitive rates, but as we’ve cautioned above, it’s not only about the rates, so delve further.
- Compare all mortgage fees. Again, the lowest rate does not always mean the best deal. Does that low rate mean you need to pay points? Other possible fees and closing costs to compare include:
- Application fee
- Appraisal fees
- Home inspection fee
- Credit report fee
- Document preparation fee
- Loan origination fee
- Title fee
- Escrow fee
- Lender fees
- Flood certification
- Compare the amount of down payment required by the different lenders you are speaking to. It may vary between mortgage lenders.
- Any other costs involved? Some lenders may require private mortgage insurance if you do not have a certain down payment.
- How was the service you received during the mortgage lender search process? Did the lender answer all of your questions in a prompt and thorough manner? Were they willing to communicate openly? This may be a good indication of the service you receive in the future from a particular lender.
Purchasing a home is a big investment and needs to be taken seriously. You want to select a mortgage lender who will ensure the entire mortgage process will proceed smoothly and efficiently. Many home buyers don’t take the time in selecting a mortgage loan that they do in selecting the right home. You should start shopping for a mortgage loan before your search for a house begins. Getting pre-approved for a mortgage loan in advance can help you negotiate more effectively when you find the home of your dreams.
Learn more about Benchmark Federal Credit Union mortgage loans, our competitive rates, and free pre-approval. We hope you will include Benchmark FCU in your mortgage lender search. Unfamiliar with the credit union difference? Learn more about the benefits of membership.