Choosing the Right Lender
Selecting the Most Advantageous Mortgage Lender
Your real estate agent will guide you through the process of securing a mortgage lender that best fits your financial needs.
Every lender is different, so be sure to choose one that will work with you and your specific needs. Shop for lenders offering the best deals. Check with several mortgage companies and use one or more reporting services. If there isn't a reporting service covering your area, begin the search at your own bank or through any of the following sources:
Independent Mortgage Companies
Independent mortgage companies make up over half of all home mortgages, including most VA-guaranteed and Federal Housing Administration (FHA)-insured loans.
Savings and loan associations and savings banks originate close to a quarter of home mortgages. Most are conventional loans – those not guaranteed by the Veterans Administration or Farmers Home Administration, or insured by the FHA.
Commercial banks are active in residential lending. Banks also are a major supplier of loans for mobile-home buyers.
Mortgage brokers act as intermediaries. A broker keeps tabs on the mortgage market through ties to local, regional, and national lenders, and can refer a prospective borrower to a mortgage banker, savings institution or a commercial bank. Brokers don't lend money and can't approve loans.
Credit unions make close to one third of all first-mortgage loans, but you must be a member.
State and local finance agencies make below-market-rate financing available to eligible low and moderate income, first-time buyers through the sale of tax-exempt bonds.
Employers and Unions
Don't overlook your employer as a source of assistance. An employer may subsidize the interest or even act as a lender. Unions are another possibility. The AFL-CIO offers what it calls "union privilege". Unions that sign on can make first-time home loans available to eligible members for as little as 3% down.
Remember, your real estate agent should be able to provide a great deal of assistance in finding the right lender for your transaction.