How to Find the Best Mortgage Lender
For the most first time would be borrowers buying a home is one of the biggest financial purchase of their life and thus if you want to be little cautious then it not mistaken. To find a mortgage lender is not a challenge but how to choose best among them that offers you best deal and competent customer service is indeed a big challenge. So take your time in shopping around talk to different lenders, check out your friend referrals to compare quotes from different mortgage lenders. It is indeed undoubtedly a time consuming task but can save your tens and thousands of dollars in future. Thus extra research and planning can really be worth your time.
Here are few tips that may be a great help for you to find a good mortgage lender.
Check out the interest rates offered by different lenders: To determine what you have to pay over the term of a loan you need to know the interest. Interest rates change quickly and if you don't have with you a great credit score then you may not be offered the lender's lowest figure. So to effectively compare different figures ask for annual percentage rate (APR) of the mortgage interest which is generally higher than the initial quoted rate because there is some fee included in it. The APR found in most of the advertisement don't always include the fee they charge while calculating ARP's. So when you actually compare them you find a great difference. So be cautious to get the clear picture of rates offered by different lenders.
Check out the discount and origination points: Most of the lender may charge prepaid mortgage interest points that lower your interest or other points for which you don't get any benefits. Before any commitment with a lender get a clear picture of type of points are given and find out how many you will be expected to pay.
If possible lock your interest rate: Interest rates always fluctuate. It may be different between the time you apply for the mortgage and at the time of its closing. To prevent it from going up lock the rate and even points and ask your lender if lock fees apply and find out what are the expecting rates would be.
Read the fine print of mortgage carefully: It is not only the principal and interest rates on the mortgage that you have to pay but there are some other costs as well so ask the lender about them which include estimated closing cost, points, transaction fee etc. If you are unsure about them ask the lender to explain each and every thing to you. Some mortgage lenders will require earnest money or a good faith deposit as well to start the loan process. Check the documents whether they kept earnest money or not and read them carefully to avoid any unpleasant surprise.
Do the background research: Ask different questions to your perspective lenders regarding their experience and qualifications. Conduct a background research on mortgage lenders or companies before going into business with them to avoid any future hassles.
Mortgage Brokers or Banks Which is the Best and Why
There is variety of ways to get mortgage but if you consider in broad sense then there are two specific channels mortgage brokers and banks. In the past home buyers have no choice and thus they turned to banks for their mortgage needs but now the scenario has changed and there are more options at your disposal as well. But each one of them has its own pro and con. Let us have a look.
Why a mortgage broker: A mortgage broker is just a middleman who work with a variety of lenders to find loans. He himself does not lend money directly. A mortgage lender thus supplies the funds and the lender may be a mortgage bank, a large commercial bank, a community bank or a credit union. The largest mortgage lenders according to mortgage daily are Bank of America, Wells Fargo and JP Morgan Chase. Because brokers are not tied to any one lenders so they can shop around on behalf of their clients and arrange them what is suitable for them.
Advantages of working with mortgage brokers
- They do all the legal work on your behalf and thus save your valuable time and efforts
- They compare wholesale mortgage rates because they are working with variety of lenders
- Wholesale interest rates can be lower as compared to retail interest rates
- It is easier to contact them because they are less bureaucratic
Disadvantages of working with mortgage brokers
- They make mistakes like anyone else
- They may overcharge you
- Make false promises with you to crack deals
- New to business and thus are not experienced or poorly educated
Why Banks: The majority of homebuyers turn towards banks when it comes to mortgage. The loan officer at the bank or the credit union is an employee of the bank and thus sells the mortgage and other loans originated by their employer. They have variety of loan options but they all draw from the same institution. The borrowers with bad credit history or need to finance tricky deals are often turned down by the banks and for them using the mortgage broker is the next possible option.
Advantages with banks
- Borrowers with long term relationships with banks might get favorable terms on home loans or jumbo loans which are available only through banks
- Banks are more trustworthy
- Offer lower interest rates in some cases
- You are familiar with bank staff and the banker who will handle your mortgage
Disadvantages with banks
- Conservative loan programs
- Lengthy process with lots of paperwork
- They also make mistake
- They may overcharge you
- Incompetence or poorly educated officer
Top Ten Mortgage Lenders and Mortgage Loan Providers in United States
Before you search for property, it is more vital to have detailed knowledge of the best and appropriate mortgage lender according to financial circumstances. By being pre-updated, you will know precisely the amount of house the bank is going to approve. Whether you are first time purchaser or you need to refinance a home loan, you must be aware about the choices available for selecting the right mortgage lender in the nation. Here is the list of topmost mortgage companies for mortgage perusal, in the United States.
Wells Fargo: Wells Fargo is the largest banking and mortgage lending company in United States by market capitalization. In 2012 its market share reached to 30%. It had a volume of about $524 billion. It is the fourth largest bank in U.S. with its head quarter in San Francisco.
Chase Mortgage: Chase is the second largest mortgage lending company in America with its total assets of $2.3 trillion. It was founded in 2000 with the merger of Chase Manhattan Corporation and J.P. Morgan & Co. Its operations are in more than 60 countries. As per a report its volume was $182.2 billion and market share of 10%.
U.S. Bancorp: U.S. bank is a diversified financial services holding company having its head quarter in Minneapolis, Minnesota. It has recognition of one of the biggest bank holding company in United States. Its revenue in 2014 is about US $10.6 billion with total assets of about US $384.2 billion.
Bank of America: Bank of America is a multi-financial services providing organization. It was founded as Bank of Italy in 1904, currently with its headquarters in Charlotte, North Carolina. It has revenue of US $88.94 billion (2013) and total assets of US $2.102 trillion its loan transactions were $79 billion with a market share of 4.3%.
Quicken Loans: Originally founded as Rock financial mortgage in 1985 by Mr. Dan Gilbert. It is the largest online mortgage lender in United States. It is headquartered in Detroit, Michigan. Quicken Loans had more than $70 billion in home loan volume in 2012, a 133 percent increase over the previous record of $30 billion in 2011.
LendingTree: LendingTree is an online lending exchange that connects consumers with multiple lenders, banks, and credit partners competing for business. Lending Tree is not a direct supplier of loans; it is instead a broker. Since being founded in 1998 it has facilitated more than 32 million loan requests. It is headquartered in Charlotte, North Carolina.
Citimortgage: Citimortgage was founded in 1812 as a public company, located in New York. Citibank is the largest bank holding company in total assets followed by Bank of America.
PHH corporation: PHH Corporation (NYSE: PHH) was established in 1946 by Duane Peterson, Harley Howell and Richard Heather. The accomplishment of PHH goes to its remarkable plan of action which empowered PHH Mortgage to turn into one of the main ten originators and servicers of private home loans in the United States. In 2013 alone, it shut $52.4 billion in home loan financing and kept up an aggregate advance adjusting arrangement of $226.8 billion.
SunTrust Bank: Sun trust bank was incorporated in 1891 Atlanta. In 2013 it had $175 billion of resources. It is one of the chief banks holding organization in United States. The bank's essential functions are mortgage lending, credit, asset management. Through its various branches, the organization gives home loan saving money, resource administration, securities business, and capital market services.
Provident Funding associates: Since its inception in the year 1992 the firm is committed towards the low cost structure and customer oriented culture. It was designated as Hall of Fame Servicer by Freddie Mac. It has its operations in more than 50 locations nationwide. It had loan transactions of about $16 billion 2013.
Current Mortgage Rate Comparison of Top 10 Mortgage Providers for a 30 Year Fixed Mortgage:
BANK OF AMERICA
SUNTRUST BANK INC.