Real Estate Industry

The Ultimate Guide to Finding the Best Mortgage Lenders for First Time Home Buyers

Mortgage Lenders

You’re ready to buy your first house? How exciting!

You’ve got the career, the down payment, and the credit, and now you’re finally ready to find a lender. But where to begin?

Finding your mortgage lender may seem like a matter of going to your bank and asking for a mortgage specialist, but it’s more complicated than that. 

Finding the best mortgage lenders for your first home is a little bit of education, a little bit of research, and a little bit of luck. It can take time to sort through all the lenders available to you and make the best decision. Sometimes, it may seem easiest just to head to the first bank you see on the road and hope for the best. 

But remember that a mortgage is between 15 and 30 years. It may be the largest financial relationship you ever hold. So doing your research and ensuring that the relationship will be a good one is worth the extra footwork and talking to multiple lenders. 

So how can you make sure you’re with the best lender for you? Let’s take a look. 

Credit report

Get Your Credit Report 

Step one is always being familiar with your own financial situation. 

Getting approved for a mortgage is a grueling process. Your lender will sift through your finances going back several years. Any errant deposits will be questioned, debts will be scrutinized, and income confirmed. Banks are not interested in taking on loans that will default, so they want to make sure you are a good risk. 

Before a bank ever pulls your credit history, you’ll want to do so yourself. Going through your own credit history gives you a chance to correct any errors and familiarize yourself with any blips that may give a lender cause to worry. 

The last thing you want is to be surprised by a forgotten debt or issue on your report. Such a thing can easily stand in the way of getting your dream home. 

This is also the time to unfreeze your credit if you put a freeze on it after the 2017 Equifax hacks. 

Educate yourself

Educate Yourself 

Knowledge is power, as they say. 

The real estate market fluctuates all the time. Interest rates and housing prices go up and down (mostly up, recently), and the market can differ based on only a few miles. 

Take a look at what the market looks like, both at the national level and in your local area. Take a look at interest rates and median housing rates in your area. 

Going into meetings with lenders armed with information will make it much more likely that you secure an honest and knowledgeable broker. 

Shop around

Shop Around 

Obviously, you aren’t going to buy a house at the first open house you attend. Why would you do the same with your mortgage lender?

This is huge. Do NOT go with the first bank you talk to just because they:

  1. Are your bank
  2. Are your parent’s bank
  3. Did your friend’s/aunt’s/hairdresser’s mortgage

Mortgages and mortgage lenders are not one-size-fits-all, and it is vital that you find what fits you and your situation. Your credit, your down payment size, and your lifestyle are all going to inform the kind of house you buy, and what kind of lender you need. 

Get recommendations from people you trust, but don’t let yourself be pressured into using someone else’s favored lender. 

Schedule appointments with lenders and talk to them about their interest rates, policies, and programs. 

These interviews (because that’s what they are, make no mistake) give you a chance to find not just the best rates, but to find a lender you feel comfortable with and are willing to enter into a 15- to a 30-year relationship with. 

Keep in mind during this process that you are in charge. Banks, credit unions, and other lenders may have the loans you want, but the decision of who to give your business in entirely yours. They should be working to impress you, not the other way around. 

Find A Lender That Specializes

Find A Lender That Specializes 

This is your first time buying a house. And you may or may not be aware of it, but there are special rules and programs that apply specifically to first-time homebuyers. 

These programs and rules vary from area to area, but the best mortgage broker for you will be familiar with them. 

First-time homebuyer programs can be complicated. The rules are many, and the bureaucracy involved is truly stunning. You need someone who can navigate the red tape with you. 

Ideally, you’ll want to find a firm or bank that specializes in first time home buyers and can walk you through the process. Finding a lender who specializes in these sorts of loans will help you feel more comfortable with the process and ensure that it is as hiccup-free as possible. 

Trust your gut

Trust Your Gut 

This is almost always the bottom line. If you walk into an office and feel in any way uncomfortable or less than totally at ease, you shouldn’t go with that lender. 

Our psyches are pretty good at judging character, and if you’re uncomfortable with a lender, there is probably a good reason. Don’t second guess yourself or brush aside your instincts. The decision of mortgage lender is too important to commit to if you are less than 100% confident in the person on the other side of the desk. 

Remember that you are meant to be a team with this person. Their personality and manner are very nearly as important as their interest rates and terms. 

Houses with mortgages

Finding the Best Mortgage Lenders For You

Finding the best mortgage lenders for your situation is a vital step in purchasing your first home. It isn’t something you should leave to chance or do haphazardly. A relationship like this has to be built on trust and confidence. 

Whether you are buying or selling, or just looking to increase your property value take a look here for more tips and help. Happy house hunting!

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