Buying a home can be a complex and difficult process. It’s important to have the right team on your side, from your initial watching of listings to your final move-in and from the real estate agent to the mortgage loan officer. When it comes to real estate agents, most people rely on recommendations from family, friends or co-workers. However, for mortgage lenders, your family and friends probably have different financial situations and different mortgage needs than you. Knowing how to differentiate between mortgage lenders can help you choose the best lender for you.
Types of mortgage lenders
In general, there are three types of mortgage lenders: banks and credit unions, mortgage companies and mortgage brokers. While it is common for people to begin their mortgage search with their bank, that may not necessarily be the best choice.
Banks offer many different lines of service, including money accounts. Their mortgages are designed for their members, and many of the lending steps occur out-of-house, meaning the processing timeline can be delayed.
Unlike banks, mortgage companies are designed specifically for lending money for real estate purchases. They have access to a wider range of loan products than a bank, and their processing can be done quicker since they handle everything in-house.
The third option is a broker. Unlike banks and mortgage companies, brokers find mortgage lenders. Brokers earn commission, which can create a conflict of interest as they may connect you to a lender who will provide them the largest return, rather than the lender that is best for you.
Choosing the right mortgage company
It seems clear that mortgage companies are the way to go to find the best mortgage for your needs. There are a lot of mortgage companies, so finding the right one can be difficult. Working with a smaller lender can provide more personal service, and ensure you get the answers to all your questions.
Companies who deal only with residential mortgage loans can streamline their process, which can provide a shorter timeline to close and may provide lower fees and interest.
There are a lot of decisions to make when it comes to buying a house. Making sure you have the right partner for your mortgage financing can help make a complicated process easier. At First Centennial Mortgage, we can help you find the right mortgage partner for your perfect house, so contact us today.