When you are ready to make the commitment and buy a home, you are in it for the long haul. Unless you can pay for your home upfront, you will most like have a mortgage payment for the next 15 to 30 years. Due to the long term commitment, it is important to find a mortgage lender that is perfect for you. To find the best mortgage lender and start the mortgage loan process, use the following tips.
Shape Up Your Credit Score
To buy a home, you need to meet a specific credit and income criteria. Meeting or surpassing these requirements helps ensure mortgage companies that you repay your loan. If you credit score is low, it shows that you are a financial risk. The leading to a higher interest rate on your mortgage. If your credit score is higher and your history proves you pay on time, you will have more room to negotiate with lenders for better rates.
Research the Different Types of Lenders
There are many lenders that you can go to in pursuit of a loan. You will want to familiarize yourself with the variety of options. The following are the most common types of lenders:
- Credit unions
- Mortgage bankers
- Correspondent lenders
- Savings and loans
- Mutual savings banks
Before you go to one of these lender, check to see of they are registered in the state you are buying a house in. To find out this information, visit the Nationwide Multistate Licensing System Registry.
Before you start looking at houses, get a mortgage pre-approval letter. Having a pre-approval letter on hand gives you an advantage over other buyers who may be interested in the same house as you.
To get pre-approved, you will have to share your financial lender. You will most likely have to share information regarding:
- Your Social Security number
- Bank account information regarding your savings, checking, and investments
- Any outstanding debts
- Salary and employer
- At least two years of tax returns, W-2s and 1099s
- How much of a down payment you can make
Do Your Homework
As mentioned above, there are a number of mortgage lenders. To search for the best mortgage rate, start online. Although you can get some useful information online, keep in mind that the quote is just a starting point. To get an accurate rate, your lender or broker will have to pull your credit information and start your loan process. After getting multiple quotes from different lenders, contrast and compare to see which one is financially sensible.