The Worst Things You Can Do When Mortgage Shopping

Many homeowners have embraced the internet as a way to secure their new mortgage loan. Whether looking to purchase a new home, or simply looking to refinance or restructure existing debt, the internet has proven to be a much more convenient way to complete the mortgage process.

The internet also provides an easy and quick way to shop different lenders.
Let’s face it: a mortgage is usually tied to one’s most valuable asset (their home) and is typically their largest liability. A mortgage loan is a big decision, and homeowners understand this. As such, borrowers want to make sure they are working with the best lender and getting the best terms available. Talking to and negotiating with multiple lenders can be confusing and time-consuming. The worst thing a borrower can do is to choose their lender based solely on the numbers initially quoted.

There are many reasons for not making a hasty decision based on the initial quote.
First, the initial quote is almost always based on many assumptions such as income, property value, credit profile, and credit score. Second, mortgage pricing is a product of time. Just like the stock market, mortgage rates fluctuate throughout the day, every day. Lastly, every lender structures loans differently making true apple-to-apple comparison’s difficult if not impossible. The mortgage industry is extremely competitive – mortgage companies simply cannot afford to price themselves out of the market. In the end, the terms of your mortgage will be very close to the same no matter which lender you choose.

So, if you can’t (or shouldn’t) make a decision strictly on the numbers quoted, how do you decide which mortgage company you should trust? The answer is simple: Do your research. Look for speed of service.

Do your own research!
Reading this article is a good first step, but doesn’t point to one lender to help you make the decision. My advice: read what others have to say! Customer reviews are the best source of real world ratings on any lender! The BBB and LendingTree.com have wonderful customer testimonials posted on their websites. There are other sources on the internet that can prove to be a good source for reviews. Reading a customer testimonial about a specific lender from an unbiased third party’s website is probably the most powerful and accurate feedback you can get!

The longer the loan process takes, the more likely the initial quoted terms are to change!
In addition to good customer service, look for speed of service! Many mortgage lenders are paperless and use technology to gather the information needed to complete your loan. This saves a lot of time as you are able to communicate and provide information on your own time. You should also consider working with a lender that controls the entire loan process. Lenders that control the loan process from beginning to end can get your loan done quickly further reducing any changes on your initial loan quote.

Work with a lender that does things differently. Since your mortgage involves your largest asset and is your largest liability, you should consider how your mortgage fits within your overall financial goals – both short-term and long-term! Any lender that doesn’t take the time to review your financial profile to customize a loan to fit your needs is simply more worried about their own interest, not yours! Although mortgage products are very similar, there is a lot of customization that can be done.

Making a decision solely based on the interest rate or settlement services could cause you to miss out on a wide variety of opportunities to improve your entire financial picture!