There are plenty of choices.
It's a Jungle Out There
The home loan industry is booming. There are more places to borrow than ever before, including mortgage companies, banks, savings and loans, and credit unions. Your first priority is to shop around, a lot! Interest rates and points vary substantially between lenders. It's going to take time-be prepared to dial lots of phone numbers.
So where do you start? Online mortgage brokers offer competitive marketplaces that favor consumers. Many publish a list of mortgage rates in the real estate section. Check with friends and coworkers. Or check with your real estate agent-some local Boards of Realtors maintain a list of rates on the Multiple Listing Service. If no rate reporting is available, pull out the Yellow Pages and start telephoning.
Reputation Counts
Don't rush to the lowest rate in the newspaper. Choosing the right lender is a major decision you'll have to live with for a long time, or at least until you refinance at a better interest rate. Your main priority is finding someone you can trust and communicate with. You must know with whom you're dealing, and that includes understanding the difference between mortgage bankers and mortgage brokers.
Mortgage Brokers
Unlike a loan rep employed at a bank or other lending institution, the mortgage broker works independently. The advantage of a broker is that they sometimes have access to more flexible loan terms and qualifying requirements-you're selecting from a portfolio of loans backed by a variety of investors. Take time to be sure you're comfortable with a mortgage broker's fees BEFORE signing a loan application.
Mortgage Bankers
The mortgage bank is more of a sole-source provider of loan services. Unlike the broker who connects borrowers with lenders, mortgage bankers are in the business of directly making loans. They make their money from loan fees, points and other charges.
On to Comparing Loan Costs
There are differences that can add up to a higher bottom line.
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