You can get a mortgage from many different sources, such as banks, mortgage companies, credit unions or a mortgage broker. Finding a knowledgeable mortgage lender who will work with you to meet your needs can make the home buying process much easier. Be sure to do your research to make sure you are dealing with a reputable lender.
Remember, sometimes getting the lowest rate and the lowest closing costs is not always the best deal. Lenders that charge less may not always be able to close your loan on time or give you the service that you are entitled to.
Prior to completing a loan application, a lender is only allowed to require a deposit for a credit report. After you have completed your loan application and you have received your Good Faith Estimate and Truth-in-Lending disclosures, some lenders may require an application deposit. This may or may not be refundable. Be prepared to pay for the appraisal, it is common for lenders to require customers to pay for the appraisal at the time it is requested.
The interest rate of the mortgage you are applying for may go up or down before you close on the home. If the loan terms and conditions allow, it may be wise to lock in the rate for a specified period of time.
To effectively evaluate different lenders’ programs, compare the annual percentage rate (APR) of the mortgage interest. It is generally higher than the interest rate quoted because it includes the lenders fees. The APR spreads the fees paid to the lender at closing over the life of the loan.
Your mortgage loan officer is required to provide you with a good faith estimate of your closing costs within 3 days of receipt of a completed loan application. This will allow you to review the transaction and question anything you are unsure of.
Once you have completed a loan application the lender will require documentation to verify income, employment and assets.
Different loan programs offer various down payment options.
Typically it takes around 30 days to complete a transaction, but some can take as long as 90 days. The actual time depends on how quickly the lender can get an appraisal on the property, a preliminary title report and verification of employment and bank accounts.
As in most relationships, communication is key. Your partnership with your lender is no different. You need to know upfront how you will be kept informed.