How to Choose a Mortgage Lender for First-Time Home Buyers

In 2020, the median price for an existing home was about $295,300. With such a high price tag, paying cash for properties isn’t an option for most buyers.

If you’re thinking of buying a house, you’ll likely have to finance the purchase with a mortgage loan. And that means you need to choose a mortgage lender to help you through the process.

If you’re not sure where to start, finding a lender you can trust can seem confusing. Here are a few simple tips to help you choose the best lender for your needs.

Ask the People You Know

The best way to find a great lender when buying your first home is to ask the people you know for advice. If you’re already working with a real estate agent, ask if they have any recommendations. They can be a resource to help you understand the options you have and find a lender that can work with you.

If you’re not working with a real estate agent yet, talk to your friends, coworkers, and local family members. You can also ask your bank or credit union about their mortgages.

This should give you a list of at least a few great mortgage lender options in your area.

Consider What Type of Mortgage You Want

Nearly every lender will be able to help you apply for a conventional mortgage. But if you’re considering buying a house with a government-backed mortgage like an FHA, USDA, or VA loan, you’ll need to look for mortgage lender options that understand how those loans work.

Before you start submitting applications or scheduling appointments with mortgage brokers, decide on what types of loans you’re interested in. Read up on the different programs available in your area and look for lenders that can help you apply for those loans.

Speak to Several Lenders

Though it’s tempting to choose the first lender you find, don’t. It’s always best to shop around and get quotes from several lenders before you sign on the dotted line.

Why? Because different lenders will look at your application in different ways, whether you have a high credit score or not.

Compare the loan principals, interest rates, fees, and other costs that each lender offers you in detail. This way, you’ll be able to choose the lender with the best mortgage rates and the largest loan amount so you can get into the perfect home.

Now You’re Ready to Choose a Mortgage Lender

Making the decision to buy a house is a big step. But making sure you choose a mortgage lender you can trust is the best way to protect your investment and your budget.

Keep these tips in mind and you’ll be able to choose the best mortgage lender for your situation. Just take care to research their reputation and make sure they offer the types of loans you’re interested in before submitting an application.

Choosing a lender is just one part of the homebuying process. Check out our latest posts for more tips to make buying your first house easy.