So you want to refinance your mortgage and get a lower rate and payment. Great! But how should you go about finding the best mortgage lender or broker for your next refinance transaction? Keep these tips in mind and you should have better luck on your next refi:
#1 The Lender or Broker Should Be Easy to Work With
If you want a really good insight to how easy a lender or broker is to work with, send an email or call them and see how quickly you can get in touch with them. Even better, if you have submitted a mortgage pre-approval form on their website, see how fast they get back to you. At this point in your relationship, they do not know if you will work with them or not, and if they still get back to you fast, this is a good sign.
Having a lender who communicates effectively with you is very important as a loan is going through the underwriting and closing process. Many days or even weeks can be added to the process if you have a lender and underwriter who do not communicate well with you. And if the lender delays things enough, it can cost you money; your rate lock only lasts so long, and it can got up after that. Communication is vital in a successful mortgage loan process.
#2 The Mortgage Lender Should Have a Strong Reputation
It is a smart idea to check online reviews for potential lenders. Of course, any lender will sooner or later have a loan that falls through, and the customer won’t be happy about it. Seeing a negative review once in a while is to be expected, but if you see many negative reviews, this is something to keep in mind. If a mortgage lender has dozens of negative online reviews, there is probably a good reason for it. The last thing you want when you are about to close a loan is for things to go wrong.
#3 How Low Are Their Rates?
If you pay a higher rate than you need to, you easily could pay tens of thousands more in interest over the life of your loan. So you want to make sure that your rate is really going to be low. There are many cases of a broker or mortgage-refinance lender claiming that your rate will be much lower than it turns out to be. Many of the low rates you see claimed online are only for the highest credit score borrowers. It also is a wise move to check online reviews to see if the promised loan rates turned out to be the case when it came time to close. If the company is not for real on interest rates, then you will likely find out about it in the online reviews.
#4 Talk to the Person Who Will Do Your Loan
If you want your loan to go well, it is a smart move to have a personal relationship with the person who is actually going to do your loan. This could be a broker, employee of a bank or a mortgage loan officer. The big secret here is this: The mortgage company that you use does not matter nearly as much as the loan originator. There are many great companies that hire terrible loan originators. If you get a bad loan officer, you could easily have a deal take months or even fall through completely. This is where getting a recommendation from a friend or colleague could be very helpful. You want to find a mortgage broker or loan officer who is easy to work with, communicates well, and delivers on promises. What better way to find one than to talk to a trusted friend or colleague?
#5 Find a Mortgage Company with Many Loan Programs
Not every lender offers every loan product. And not every lender has FHA and VA home loan products either. Also note that down payment standards, LTVs and credit score requirements can vary by lender as well. So it will always pay to shop around. If you are looking for specific niches, like stated income, you need to find no-doc mortgage lenders that have a strong background with success in this type of lending.
#6 Opt Out of Lenders Sharing Your Information
If you fill out online forms looking for loan quotes, you will soon be inundated with emails and phone calls from many lenders. You can visit www.donotcall.gov and be put on a do not call list for five years. Generally you will find that mortgage brokers offer more loan programs than a bank or credit union. Therefore, it should be tops on your list to call a few mortgage brokers with access to hundreds of different loan programs.
Conclusion on Shopping Lenders
There are many sources of mortgage loans online today, and if you shop around enough, you probably can find a program that will work well for you.
Generally, experts recommend that you have a good lender well established before you start looking for a home. If you are pre-approved and you already have a good relationship set up with your lender, it is much more likely that your mortgage loan will go smoothly.