What to Consider when Choosing a Home Lender

What if buying a home were as simple as buying a new computer? You have a lot of options, so how do you decide where and what to buy?

There are, of course, several factors to consider. In this post, we’ll share how to shop for a mortgage, how important your rate truly is and what you should consider before choosing a lender.

How to Shop

When making any purchase, you’re likely going to consider ease, time, and cost. You may be thinking: how difficult will it be to get the home loan I need? How long will it take? How much of my time am I willing to invest? How much anxiety will I endure? What am I willing to pay to make it easier?

Before exploring different lenders, it’s important to determine what your priorities are.

If you value price over ease and are willing to spend more time to get what you want, you’re a bargain hunter. And sometimes when it comes to a home, you may be too narrowly focused on the “best” rate.

The truth is that pricing doesn’t vary widely among competitive lenders. Much like computers, most are around the same price, but different retailers offer different add-ons, features, and services.

In the prime credit market, the rate difference between competitive lenders on a $500k loan will typically correlate to monthly payments that are all roughly within $100 of each other.

There are lenders that focus on more complex or risky transactions and price their rates higher accordingly, however in the prime credit market, the rate difference between competitive lenders on a $500k loan will typically correlate to monthly payments that are all roughly within $100 of each other (assuming .25% rate differential).

Price used to be the only factor of home financing you could control, but because of the technology and process advancement the mortgage industry is going through, there’s now so much more. And often lenders for focus solely on the “lowest rates” are typically the ones that don’t have experiential benefits to help sell their services.

It’s the difference between getting certain computers with different memory, speed, operating systems or even weight – customer experience can vary wildly. The low rate becomes a necessity to offset the stress, anxiety, and delays you will likely suffer.

For the folks who place a high value on their time and need a new computer right away, efficiency and speed matter. You may opt to visit the closest location for your purchase or order through an online retailer with overnight shipping instead of spending days looking for the lowest price option. This doesn’t necessarily translate to the best experience, but hey you get what you want, when you need it.

Then their are consumers who take their time to get both the experience and the value. You want options, ease, speed, and a competitive price. When it comes to mortgages, that means finding a process and provider who offer education what you may qualify for, an intuitive application process, and help every step of the way. And within that group of providers, you’ll narrow down by rate.

The Importance of Rate

Would you opt for a computer simply because it is the cheapest, or find the one that fits your unique situation? You don’t necessarily have to spend more to get exactly what you want. Thanks to advancements in technology, it’s easier to get a the right mortgage without compromising price. Most lenders offer highly competitive pricing, but the price of your mortgage is determined by so much more.

Factors like how quickly you can close, lender fees, whether your lender can help you win a bid in a competitive market, and the amount of your time that is required to complete the transaction all have an impact on the final economics of the loan. In addition, the loan program and how it is optimized for your unique situation will make a huge difference.

When getting a digital mortgage, you have more control than ever before, for your rate and more. There are many factors to consider, and having an interface where you can compare different scenarios is key. Imagine having full visibility into how your eligibility is being determined and greater control of your transaction from start to finish. Or being equipped with data and insights to make an informed decision, and still having a team of people at your back. Sounds pretty great, right?

Be Neat & Simple

Don’t fall into the trap of running to your nearest bank or going with the site with the cheapest rate. Choosing a traditional path could leave you spending much more time, effort, and money. In today’s contemporary age of lending, getting a home loan should be a positive experience. You may not even have to leave your home if you fully leverage digital options and compare scenarios online. Just like shopping for a computer.

So don’t stop at rate. Make sure every part of the process is right for you. That’s the kind of control you want when making a purchase as big as a home.

Have 20 minutes? Start your loan application now.