Looking to shop for the right mortgage lender? Considerations and 10 questions you should be asking.
A collaboration with Allison Oliva (Moore), Loan Officer at Leader Bank
Unless you’re a cash buyer, a crucial piece of home buying is having the right mortgage lender. An excellent mortgage lender doesn’t just explain financing options; they help you understand potential costs and guide you towards confident decisions that support your financial goals. Find someone who takes care of you like they would their loved ones, and you’ll find the entire process manageable… dare I say even delightful.
Where to start your search for the right Mortgage Lender
The best resources for finding a trustworthy and dedicated mortgage lender are 1) your real estate agent, since they’ve worked with an array of lenders and know which ones deliver, and 2) your friends and family who have recently purchased a home.
Once you’ve gathered a few names, take a little time to research. Read online reviews and check responsiveness to narrow down the mortgage lenders with whom you resonate.
Thereafter, understand who you’re talking with. A key consideration to discern between your recommended contacts knowing what type of mortgage lender the loan officer represents. Is this person a loan officer at a local bank or credit union? Does this loan officer work for an independent mortgage banker or an online lender? Each of these lending institutions comes with its own advantages and types of financing offered- not all offer down payment assistance or a government program like FHA, VA, and USDA loans.
Should one be working with a local lender?
Yes. All things equal, prioritize your local lender. An offer that is backed by a preapproval letter from a familiar lending institution is an advantage.
Why?
Because humans are creatures of habit. For the same reason that we revisit our hairstylists, real estate agents apply that logic when evaluating offers – preapproval letters from known lenders get a “oh yeah, I’ve closed with this lender before”, while the contrary gets a “hm, I don’t know them, are you sure this preapproval letter is solid?”.
Take this advice from experience: my buyers have lost out on an equally priced offer simply because the sellers have had a bad experience working with (name of large banking institution). It did come down to the wire.
How many lenders should one apply to for a mortgage?
As many as you like, though most would stick with 3. In fact, the system is geared to allow consumers to shop for the best mortgage rates: credit bureaus honor a 14 - 45 day window for rate-shopping inquiries.
This means that multiple loan officers can pull your credit within a short time, and it's only considered one hard inquiry.
Questions to ask when shopping for the right mortgage lender
Are you available to answer questions after 5pm and on weekends? Most homebuyers are touring homes and submitting offers on weekends. Will your loan officer be available to review numbers with you?
What documentation do you need to review for a pre-approval? Thorough pre-approvals require a review of your income, employment, and asset documentation. Typically, this includes your two most recent paystubs, your two most recent bank statements, and your last two years of W-2s or applicable tax forms. The actual documentation needed may vary based on your desired loan program and your form of income or employment.
Do you require a hard credit pull to issue a pre-approval? Without a hard credit pull, loan officers don't have all the information they need to provide an accurate review of financing options or eligibility. For this reason, evaluating agents know to ask if the preapproval letter is backed by a hard credit pull.
Do you offer upfront underwriting? The upfront underwriting process allows eligible homebuyers to have their pre-approval upgraded to an official loan approval. In a Seller’s market, an offer presented with upfront underwriting represents a lower risk for the Seller and a quicker close. FYI, speak to Leader Bank about their Purchase Pass program!
Are you able to issue preliminary appraisal waivers? An offer with an appraisal waiver eliminates the risk of a renegotiation should the appraised value fall short of the accepted offer price. Sellers love that, and Leader Bank has a tool that allows its loan officers to check if a property will qualify for an appraisal waiver based on the purchase price and loan amount.
Are there any loan programs I may qualify for that we haven't reviewed yet? Has your loan officer walked you through the pros and cons of certain loan programs you're eligible for? Which program is the best fit for you based on your financial goals? Different loan programs have a variety of short- and long-term costs and benefits to consider.
Will you be sending me a Closing Cost Worksheet or a Loan Estimate? Will your loan officer take the time to walk you through each estimated closing cost? Have they discussed escrows with you, or explained the difference between your interest rate and the APR?
Are the interest rates you've quoted using points? Points are optional and can be used to buy down your interest rate. Homebuyers should consider a break-even analysis to determine if buying points fit their financial goals.
What is the lock period on the interest rates you've quoted? Your interest rate will likely be "floating" throughout your home search. This means your rate is subject to change as mortgage markets adjust with the economy. Your Loan Officer should walk you through the process of locking, when to lock your rate, and how long you should lock it for. Typically, shorter lock periods such as 15- or 30-day have more favorable rates compared to longer periods such as 45-, 60-day, or more.
Will you be my main point of contact through the entire loan process? Will they be personally available to you all the way through closing… or punt you off to an assistant who may not understand the nuances of your financial situation?
About Allison Oliva
Allison Oliva (Moore)
Loan Officer NMLS #2160885, Leader Bank
Member FDIC | Lender NMLS #449250 | Equal Housing Lender
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Working with me, you'll find that I take my client-for-life mentality seriously. You'll have my personal cell phone number and open communication 7 days a week. I personally oversee that all your questions are answered throughout your entire home-buying experience. I will continue to provide resources and information you need long after closing to continue working towards your financial goals as a homeowner.
Leader Bank has repeatedly been ranked the number one residential lender in Massachusetts by purchase volume. We are a conventional bank with a unique residential lending division. Leader Bank empowers loan officers like myself by offering a wide variety of home financing options, including down payment assistance and government loans, with numerous investors so that we always have financing solutions and competitive rates to offer. Being a one-stop shop provides our clients with a seamless home-buying experience.
One way that I help my clients win accepted offers is to call the listing agent and confirm that my clients' pre-approval has been thoroughly reviewed with supporting documentation for their income, employment, assets, and a hard credit pull. I inform them that I am personally available throughout the transaction to ensure seamless communication. Leader Bank is well known in our area, and real estate agents are consistently impressed with our services!