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You may prefer to work directly with a lender, or have a mortgage broker help you compare a few different lenders.
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Decide whether you want to work directly with a lender or use a broker, then find a company that offers the type of mortgage you need.
By applying for preapproval with several lenders, you can compare interest rates and loan amounts.
Loan estimates help you see rates, closing costs, and monthly payments from different companies.
Choosing the best mortgage lender is one of the most important decisions in the homebuying process. The lender you pick determines the amount you can borrow, your interest rate, and the fees you’ll pay. Here are tips for choosing a lender that fits your needs.
Choose a type of mortgage lender
There are many types of lenders, and they differ from each other in nitty-gritty ways, such as how they access funds for your loan. But as a consumer, you’ll probably look at two main kinds of lenders:
Direct lenders. You work one-on-one with a direct lender, and the company provides your financing. A direct lender could be a bank, credit union, or lending company such as Better Mortgage or Carrington.
Mortgage brokers. A mortgage broker is the middleman between you and a lender. A broker helps you compare lenders and find the best deal, but you might have to pay them.
Choosing between these two can be tricky because some lenders work only with brokers, and others do not work with brokers at all. Brokers do a lot of the work for you, but you may prefer to work directly with lenders if you just want to compare a few of your top options.
Find a lender that offers the type of mortgage you need
Not every lender provides each type of mortgage. For example, Lender A may offer only conforming and jumbo mortgages, but your credit score is too low to qualify for either. You’ll probably want to go with Lender B, which offers FHA mortgages for people with lower credit scores.
Most lenders have conforming and jumbo mortgages. Conforming mortgages are what you might think of as “regular” mortgages, and jumbo mortgages are home loans …read more
Source:: Business Insider