Marcia's Blog

The key to comparing home lenders

If you’re thinking about buying a house in 2019, your lender will be one of the most important parts of your homebuying team. For that reason alone, picking a lender shouldn’t be taken lightly. If you want to improve your odds of making the best decision, read on to learn how to narrow down your choice.

Planning to buy a house this year? Choosing the right lender is critical to your success.


All lenders aren’t the same, and your unique financial circumstances will play a role in determining which lender is best for you. The key to making the best choice is to educate yourself.  Here are some strategies to keep in mind when you’re beginning this important process. 


Put yourself in the best position possible. Before you even approach a lender, make sure your finances are in as good condition as possible. The better your credit score, the better the terms you’ll receive from lenders. You also want to figure out if your financial picture is strong or if it can use some improvement. A homeownership advisor can help you to evaluate where you stand.


Create an improvement plan. If it turns out that your credit or your finances could use a little boost, your next step should be coming up with a strategy to improve your financial standing. A homeownership advisor can help you see what areas need the most improvement and help you set up a plan to turn things around before you reach out to lenders.


Get pre-approved for your mortgage. Identify multiple lenders that you’d potentially like to work with. The U.S. Department of Housing and Urban Development offers a listing of lenders that you can start with.  If that sounds overwhelming, your homeownership advisor can help you figure out how to narrow down your list. By getting pre-approved before you start seriously looking, you’ll know exactly what you’ll qualify for.


Compare the mortgage rates and terms. Once you’ve been pre-approved by multiple lenders, you’ll want to see who can offer you the best deal. Not only should you look at the interest rate, but you want to compare other fees as well, such as the lender’s fees and total closing costs. In other words, you want to look at the total cost of homeownership. Make sure you read the fine print to truly understand the terms of the loan. Again, your homeownership advisor can help by explaining anything that you don’t understand.


Consider the service. There’s more to deciding on a lender than just looking at the loan. Pay attention to the service you’re getting when you reach out to a particular lender, as well. For example, if it takes a long time for someone to return your phone call or email, you might decide that a more responsive lender would be better suited for your business.


Buying a home is a huge investment. If you’re going to spend that much money, make sure you have a lending partner that is right for you. Contact HomeFree-USA to get more guidance on putting together your homebuying team.