The majority of Americans who purchase a home need to take out a mortgage in order to do it. More than 60 percent of homeowners today are carrying a mortgage, with the average American owing about $140,000 on the home they live in.
If you're thinking about buying a home in Seattle in the near future, one of the most important aspects of the process will be searching through the best mortgage lenders to find the one that's right for you. If you don't do this, you could end up paying more than you should have to for your home in the long run.
Do you need help sifting through the best mortgage lenders? We're here to provide you with the assistance you need.
Here are five tips that will allow you to find the best mortgage lender for your specific situation.
1. Consider Which Kind of Mortgage Lender You Want to Work With
One of the first things you should do when you start looking around for the best mortgage lenders is to consider what kind of mortgage lender you ultimately want to work with.
There are very large mortgage lenders that work with thousands and thousands of homeowners every year. There are also smaller mortgage lenders that work with a much more select group of people on an annual basis.
Large mortgage lenders are typically carrying the highest interest rates in the business. While that won't always be the case, you're more likely to find the most competitive interest rate on a mortgage with a smaller lender that has a lower overhead (THINK--Big Building = Big Cost).
That being said, large mortgage lenders don't always have the resources to deliver exceptional customer service to those who work with them, what they do have is a large marketing budget. Because of their volume, they typically find themselves best suited for a bank. You will have to turn to a smaller mortgage lender to get the personalized service and rates if that's something that's important to you (THINK--Mom 'n Pop).
You should do your homework and take a look at both big and small mortgage lenders since there are pros and cons to working with each of them. If nothing else, you should get in contact with a couple large mortgage lenders as well as a couple small ones to see the difference in the way you're treated.
You should narrow down your search to either large or small mortgage lenders before you move forward. It'll allow you to put together a pool of mortgage lenders from one side or the other that will suit your needs.
2. Speak With Your Real Estate Agent About Helping You Find a Lender
There are a lot of homeowners who struggle to find the best mortgage lenders for one very simple reason. They don't have the faintest idea of where to start their search.
If you fall into this category, you're not alone! It can be very overwhelming trying to figure out how to find a bunch of mortgage lenders that would be best for you. There are so many of them out there, and they all claim to be #1!
If you're already working with a real estate agent during your Seattle home search, they would be an excellent resource when it comes to finding the best mortgage lenders. Chances are, they have probably worked with dozens of mortgage lenders in the past.
Ideally, you want your real estate agent to suggest the right mortgage lender for you, not just the mortgage lenders that they work with the most. They might be tempted to simply send you in the direction of a mortgage lender they work with all the time because it is what they are familiar with.
But even if they do that, it will, at the very least, give you a place to start. Otherwise, you could be left looking high and low for mortgage lenders and unsure of where to turn to next.
It'll also allow you to ask your real estate agent any questions you might have about mortgages as a whole. Your agent should be working hard on your behalf to make sure the home-buying process goes as smoothly as it can possibly go. That should include making you feel comfortable with the idea of taking out a mortgage.
Let your real estate agent know if you're confused as to where to find the best mortgage lenders in the Seattle area.
3. Ask Friends and Family for Mortgage Lender Recommendations
Even if your real estate agent is a stand-up person, after speaking to their referral, you might not feel comfortable trusting their mortgage lender recommendation.
If that's the case for you, then another step you can take is checking in with friends and family about the lenders they used when they obtained a mortgage.
In a perfect world, you should find someone who went through the mortgage application process recently. They should be able to guide you in the right direction by providing reviews on the mortgage lenders they spoke with while buying a home.
But even if it's been a while since your friends and family took out a mortgage, they should be able to describe what it's like working with their mortgage lender.
Remember: You're not just going to be working with mortgage lenders when you apply for a mortgage. You're also likely going to be working with them for the next 15 or 30 years as you pay off your mortgage.
You want a mortgage lender that makes it easy to pay your mortgage every month. You also want one that will stop and answer questions you might have about issues like refinancing.
You can find a mortgage lender that will do all of this for you when you seek out recommendations from friends, family members, and those you trust most.
4. Search Around for the Best Rates Offered by Mortgage Lenders
At the end of the day, you probably want to do whatever it takes to get the best possible interest rate on your mortgage. If you choose to work with a mortgage lender that offers rates that are even just slightly higher than others, it could cost you tens of thousands of dollars over the life of your mortgage.
With that in mind, you should do as much research as you can on the best mortgage lenders in Seattle and find out the interest rates they're offering as of right now. This will give you a better idea of how much you can expect to pay for your mortgage every month.
Try not to get too caught up on the advertised rates that are put out by mortgage lenders. Often times, those rates are only available to those with the very best credit scores as well as those who can afford the largest down payments on their homes (upwards of 40 percent down).
Instead, reach out to as many mortgage lenders as you feel you need in order to see which rates you would be able to access if you chose one lender over all the rest. It'll help you to make a better decision when it comes time to choose the lender that will work best for you. Make sure to do this on the same day, if at all possible. Since rates are constantly changing, the lender with the lowest rate today may look like the worst lender tomorrow, if rates drop.
5. Think About Working With a Mortgage Broker to Track Down a Lender
Whether you want to avoid the struggles that accompany trying to track down the best mortgage lenders from the beginning or you get frustrated at some point during the process of your search for a lender, working with a mortgage broker might be the best way for you to go.
A mortgage broker is someone who can work on your behalf to find a mortgage lender that will offer you the most money, the best interest rate and the most favorable terms. They will take all of your financial information, speak directly with different lenders in the area, and come back to you with a short list of available lenders. They make their money by saving you money.
You won't have to worry about searching for mortgage lenders on your own when you take this approach. Within a couple of days and sometimes hours, a good mortgage broker can find you the right lender for your situation.
You do want to be mindful of working with the right mortgage broker. You need someone reputable who won't simply choose a lender for you based on the commission they're set to receive.
You should spend some time speaking with brokers about how they could potentially help you before bringing one on board for your mortgage lender search. You should also read reviews for individual brokers and ask them for recommendations from past clients.
Don't be afraid to ask the broker what their office compensation is set at. You're not asking what they make, you're asking what their company charges. You wouldn't buy a car without knowing the price, right? So why "buy" a mortgage without finding out what the service charge looks like?
A reputable broker will be happy to share what their commission structure looks like, because they know they're worth every penny!
You can make the entire mortgage lender search a lot simpler with a good mortgage broker by your side. You can also eliminate most of the stress that usually comes along with trying to find a mortgage to buy a new home.
In the case of the best mortgage brokers, they can even refer you to reputable real estate agents. Since they're not allowed to make any money on the referral, you can rest assured that they're only looking out for your best interest.
Use One of the Best Mortgage Lenders to Buy Your Seattle Home
Do you want to secure the best interest rate on a mortgage and ensure that you get the best lending options, too?
We can tell you all about the mortgage application process and help broker the right deal for you and your family. We would love to tell you more about how we operate and what we can do to help move your home-buying process forward.