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Selecting the right lender - Factors to consider

Author: Jessica Bennet
Community Mentor
Ask Jessica
Posted on: 07th Jul, 2005 12:04am
Sometimes borrowing money becomes unavoidable. You can
borrow money for a variety of reasons starting from purchasing
a home to meeting medical emergencies. Anyways, selection
of a genuine lender is the key to successful mortgage loan
process. While selecting the right lender, you need to take into
consideration the following factors.



  • Hidden costs

    Do not only get attracted by the low interest rate associated in a
    mortgage. Sometimes, mortgage lenders prefer not to disclose everything to the borrowers. Before taking out a loan, you need
    to check out whether or not, there are some hidden costs.



  • License

    Check for the necessary license of the lender. Without a proper
    license, a lender is not legally eligible to issue mortgage loan.


  • Clean records

    Try to select a lender who possesses unblemished records. You
    can check the records of a lender by contacting the office of the
    Better Business bureau, located in your locality.


  • Compare rates

    Before picking your lender, you must compare the rates offered
    by different lenders. This will help you find out the best lender.



By considering the above mentioned factors, you will be able to
find out the right mortgage lender.
Posted on: 07th Jul, 2005 12:04 am
Should i focus on who advertises the lowest rate and forget the type of institution?
Hi Guest,

It is advisable that you should not go only after low rates; rather you should consider the type of institution you are dealing with. This is because the interest rate may change after 30 to 60 days. In case you prefer a longer lock in period then you will have to pay a higher interest rate. But whichever rate you agree upon, you should state it in writing to avoid any discrepancies later on.

You should first check whether your mortgage lender has a license or not. You can find it out by getting the annual report of the lending institution from the bank where it is sent. This will enable you to know if the services of the institution are satisfactory. You may contact the local office of the Better Business Bureau to find out whether their records are clean or you may send them your queries regarding the lender via the internet.

You need to check that you are not paying a large sum as hidden fees to make up for the low interest rate. No doubt increasing your savings may be the top priority, but you should also see that your lender is trustworthy and you don't lose by making the deal.

Hope to receive your feedback.

Regards

Sam
Posted on: 07th Jul, 2005 01:49 am
Advertisements do not carry all the picture. So, you should not believe on the words blindly while choosing a lender.

A mortgage is an important commitment and perhaps the biggest financial deal in the life of a common man. So, adequate precautions should be taken and queries should be made.

It's better to look for the reputable lenders or lenders with whom people known to you had satisfactory deals. But, here too you have to judge from your own angle.

Generally, when you look for a lender, check the interest rates, points, op-front fees and service provided by the lender and compare with others.

James
Posted on: 09th Feb, 2006 10:31 am
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