How to Pick the Right Mortgage Lender
Buying a home is one of the biggest financial investments that you’ll make during your lifetime. Therefore, it’s important to find a skilled mortgage lender. The right lender will help you save money on your home and while still getting a home that you’re happy with. A good lender will know how to look for different fees and rates offered by various lenders, which in turn can amount to significant savings. Before you start shopping for a home, it’s important to find a lender who you work well with and who has your best interests in mind.
Questions to Ask When Choosing a Mortgage Lender
How Do I Choose the Right Mortgage Lender?
This is a common question among people who are shopping for favorable mortgages Las Vegas. You will work closely with mortgage lenders to select, apply for, and settle on a loan to buy your home. Along with having compatible personalities, many factors are important to think about when choosing mortgage lenders too, including:
- Income
- Credit score
- Savings
- Property
Your personal financial factors can determine the mortgages and mortgage rates that you are eligible for. Even the type of home that you’re looking to buy and your preferred location can influence your choice of lender. Therefore, experts recommend deciding where you want to live and setting a home budget first before you even start to look for lenders.
When you do start the process of locating a lender, do some shopping around first. It helps to interview a few different mortgage lenders to figure out which mortgages you will qualify for based on your financial background and your preferences for housing style and location.
Fees and Rates
When you are looking to buy a home, you want to make sure that you get the best fees and rates possible among mortgage brokers Las Vegas. Consider that if you purchase a home for the average cost of $250,000, a marginal variation in rates and fees can add on $10,000 throughout a loan’s lifetime if you have a 30-year loan. Therefore, it is a good idea to have a lender help you evaluate your personal and financial situation to determine where and how you can save money on rates and fees. Mortgage lenders will evaluate your credit score, down payment, and debt-to-income ratio when giving you a rate. Generally, having a high credit score, minimal debt-to-income ratio, and making at least a 20 percent down payment will give you more favorable rates and cost savings down the road.
Types of Mortgages
There are various types of mortgages Las Vegas available for prospective homeowners. Finding the right kind of mortgage can also help you save money. Additionally, keep in mind that mortgages have different terms. The most common are 15-year to 30-year mortgages, but some have shorter or longer periods. A skilled loan officer can help you understand which mortgage term is best for your needs and financial situation.
- Fixed-rate
- Adjustable-rate
- Government-backed
- Conventional
- Reverse
A fixed-rate mortgage is the most common type of mortgage available for home buyers. Fixed-rate mortgages have a set interest rate that does not change throughout the loan’s lifetime, which means you’ll have predictable loan payments for the duration of your loan. If you get a fixed-rate mortgage, the main variables you will have to worry about are homeowners insurance and property tax payments, but nothing more.
Adjustable-rate mortgages are another option. In contrast to fixed-rate mortgages, adjustable-rate mortgages have interest rates that fluctuate from time to time. The interest rate is usually set, or locked, for a certain period, such as one or two years, but it is subject to change after that. While the interest rate may be lower on an adjustable-rate mortgage to start with, it can increase over time. Therefore, an adjustable-rate mortgage is considered a better option for experienced homeowners or for people who aren’t as concerned about having to potentially pay more in monthly housing expenses later on.
A government-backed mortgage is a mortgage that is secured by the federal government. Government-backed mortgages are issued by approved mortgage lenders. They are often a good choice for homeowners who have a lower credit score and can’t pay the standard minimum down payment. Monthly payments may also be lower if you get a government-backed loan. There are some important considerations to think about with this type of loan, however, including that there may be stringent eligibility standards and the home appraisal process may be lengthier than with other types of mortgages. Additionally, you’ll need to have a minimum credit score to qualify for a government-backed loan. Most loans are available to homeowners with a credit rating of 500 if they make a 10 percent down payment, or a credit rating of 580 with a 3.5 percent down payment.
Conventional loans are another option. They come in two basic forms, which are conforming and non-conforming. Conforming loans must meet standards set by Fannie Mae and Freddie Mac. These loans are generally sold to investors. Non-conforming loans, also called jumbo loans, are loans that are above the average lending amount. Across most of the country, loans are classified as non-conforming if they amount to $510,400 or more.
Along with the loans above, older homebuyers age 62 and older may qualify for a reverse mortgage Las Vegas to assist with homeownership.
Personal Recommendations
Knowing what kind of mortgage you qualify for and your basic needs and requirements as a homeowner are a good start to helping you find the right mortgage lender. However, you will want to make sure that you are working with an experienced lender as well. Even if you are working with a bank or large organization, you’ll want to make sure that the specific lender you are working with has experience. You can always ask for personal recommendations from family, friends, and financial professionals.
To make the most of your home buying experience, you will need experienced mortgage lenders on your side. Contact us today for more information about getting started with buying your next home.
Get to Know Drennen Home Loans, Las Vegas Mortgage Lender
The Drennen Team is dedicated to finding you great rates and loan options while offering some of the fastest loan turnaround times in Vegas. Our goal is to act as a trusted advisor, providing highly personalized service and helping you through every step of the loan process – from application to closing and beyond. It’s all designed to exceed expectations, provide satisfaction and earn trust.
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