Podcast - 075: How to find the right lender when purchasing a home?
In this episode, realtor Anthony Luevanos and lender Angel Luevanos explain what you should be looking for when selecting the right lender when purchasing a home.
Should you interview to find the right lender?
Yes, at least three lenders. Before the interview, look at their Google and Yelp reviews. Ask for recommendations for clients closest to your buyer profile. And remember that the lender with the lowest interest rates is not always the best.
If you are shopping rates, keep it under two weeks, so the credit bureau doesn’t continue to ding your credit score.
What type of lenders are there? (add this title to the caption)
There are several types of lenders to consider, each with pros and cons. Some lenders may offer lower interest rates, while others may provide better service and availability around the clock.
If you are a first-time homebuyer, maybe looking at a lender who is available and handles less volume may be better so they can dedicate more time to you. If you have purchased multiple homes before and understand the process, maybe the lender with the lowest rate is all you need.
Here are the five most popular types of lenders with examples of each:
Direct lender - Quicken Loans, loanDepot, PennyMac
Online lender - Rocket Mortgage, Ally, Better
Big Banks - Chase, Wells Fargo, Bank of America
Credit Unions - Navy Federal Credit Union, Pentagon Federal Credit Union, Alliant Credit Union
Mortgage Broker
What should you look for in a lender?
Interest Rate - make sure the lender is not charging you points or fees for the rate
Availability - will the lender be available for me after hours, on the weekend, and answer any questions I have at a moment's notice
Communication - can the lender clearly communicate the mortgage loan process in a way that works best for me
Knowledge - does the lender and their team thoroughly understand the loan process and have the experience to share
Market Expertise - it is essential to hire a lender who knows what it takes to win a bidding war and has their finger on the market's pulse
Selecting the right lender when purchasing your home is crucial. Select the lender who checks off more of the boxes for you and is the best fit. The interest rate is not the end-all-be-all. You can choose a lender with a lower interest rate when refinancing in the future.
What system or process does the lender have to ensure the best service?
Here are some examples:
- Thorough pre-approval packet with a pre-approval letter, DU, credit scores, and proof of funds
- Guides to understand the home loan process or for a first-time homebuyer
-Weekly check-ins
- Same-day mortgage estimates
- Group chat with a realtor with daily updates
- How quickly can they close and buyer contingency periods?
“One of the most important questions to ask a lender in this market with limited inventory is, ‘How will you help me find a home?’ (add this title to the caption)
Does the lender network with listing agents to see if they can provide an insight scoop to help you get your offer accepted?
Will they call the listing agent to provide financial analysis and put in a good word when your offer is accepted?
Will they provide weekly mortgage rate updates to let you know how it has affected your pre-approval amount and estimated mortgage payment
Is the lender out on the field hosting open houses? If so, ask if they can host an open house for your preferred home.
How will the lender help me after purchasing my home?
Will they provide:
Market updates?
Equity updates?
Mortgage rate updates?
Quarterly check-ins?
Find a lender who will be your go-to for life. In our opinion, most of the value comes with selecting the right lender after the home sale. A lifetime lender will let you know once you reach 20% equity and should refinance when interest rates are lower and should refinance when it’s time to find the next rental, and how to build your real estate portfolio. This will likely save you more than selecting a lender who just offers the lowest interest rate but does not check in to provide more ways to lower your payment.
This market is tough, and we understand that. So we made a free eBook to help you. “How to get a good deal in a seller’s market” eBook