What to Look for in a Mortgage Lender
- First, off they’ll all have a license. That is a good starting point. Generally, their website or their business card will list an NMLS#. That will let you look them up if you need to.
- A lot of what makes a lender good to work with is subjective. Try to get someone you trust to recommend someone they have worked with. Realtors are a very good resource for referrals because they have a strong basis for comparison. Your Realtor has done multiple transactions, with many different lenders and can provide you with a few options.
- Get a local lender. They’ll be able to understand the local market and help you get a loan that is more competitive in your area. You can work with out of state lenders, but they might write a loan that isn’t as compelling to local buyers (plus it will help you keep Austin weird!)
- Try to make sure that within their bank they don’t have to send your loan application out of state for underwriting and approval. Many banks have in-house underwriting which can help speed up the loan process and avoid problems that can complicate your closing.
- Look for someone who will provide an itemized estimate of closing costs, fees, and interest rates. Someone who gives you a written estimate with an itemized breakdown is giving you the ability to closely comparison shop with other lenders. If they give you a very detailed breakdown of how the loan they plan for you works it means they are confident that it is a good deal that will stand up to scrutiny.
Make sure to ask these Questions of a Potential Lender
- Contract to close, how long will it take to finish my loan? – This helps you avoid delays that can disrupt your closing. Generally, the last hurdle of a transaction is funding the deal. It is a major letdown if the loan keeps it from working out.
- What is the structure of the banking entity you work for? Is it a large national bank, a local credit union or a regional entity? Ask what they see as the advantages/disadvantages of their institution. (often the smaller the institution, the more flexible they can be, but large banks sometimes have better support for specialty transactions)
- Decide whether you want a loan officer that mainly meets in person or if you want them to meet mostly online or over the phone. Everyone has a different working style so compatibility is important here!
Keep an Eye Out For
A good tone of conversation – A good loan officer isn’t going to push you in a particular direction, they’ll usually lay out multiple options, and explain those options for you to choose from. The meeting should be an open-ended conversation where all of your questions are listened to and answered. It should be an educational process and not a high-pressure situation.
What to bring to a First Meeting
To really get into the useful number crunching, your lender is going to need real numbers to work with. Bring these items with you for the most useful and exact conversation with your lender.
- Your Driver’s License or State ID
- A copy of your Social Security card
- Your homeowner's insurance info (if applicable)
- Your most current two pay stubs from your work
- Federal tax returns for the last two years
- W-2s for the last two years
- Contact info for your Realtor, CPA, Landlord and your employer
- Two Months of account statements for your Savings, Credit, and Checking accounts