You have found the house of your dreams. The next step to purchase the house of your dreams is to either pay cash or get a home loan. There are many different choices when it comes to choosing the right lender for your home loan. It is important to choose the right lender and make the home loan process the least stressful part of your home buying transaction.
How do you choose the right lender to make your home loan a less stressful process? Here are few things you can do when making your decision.
Learn the lingo. The lingo of the lending world can sound like a foreign language. They use different acronyms on a daily basis. Ones like GFE (Good Faith Estimate), TIL (Truth In Lending), FICO ( Fair Isaac Company), ARM (Adjustable Rate Mortgage), HUD (U.S Department of Housing and Urban Development), and PMI (Private Mortgage Insurance). When you familiarize yourself with the language it will help you understand what the lender is talking about when they discuss some of these acronyms.
Ask a family member or someone you know and trust. A family member or a friend who has gone through the home loan process can give you the details of their transaction. It is valuable to talk with them to find out how it was to work with the lender they chose. This will help you prepare for your home loan process. By preparing yourself it can make working with the lender a less stressful process.
Ask your financial advisor. Your financial advisor may work with several lenders who can assist you in obtaining a home loan.
If you use a CPA for tax purposes, they may be able to provide you with a lender who they may have a current relationship with.
Another resource you could choose is your bank. The bank you currently have your checking or savings account may be able to provide you with your home loan. Ask the bank if they have a streamlined process for you since you already have an account with them. Most lenders who offer this service make it easy for the client to obtain the home loan with little to no documentation.
Another option is to use a mortgage broker. The lending business is a very competitive business. A mortgage broker will have access to several lenders who will want to lend you money. The broker will collect a fee for his services. They will either charge you upfront or will be paid on the backend of the loan from the bank he chooses to fund your loan. Mortgage brokers should be a trusted person who has your best interest in mind. The mortgage broker will be putting all of your documents together to send to the lender on your behalf. This can help in making the process less stressful. Do not be afraid to ask the mortgage broker questions during the process.
Online research. Many of today’s lenders have online portals you can apply for a home loan through. Look for a phone number you can call to ask someone about the home loan process they provide. If decide to apply for a loan, the lender will have to review your credit. You will want to narrow down the number of lenders you allow to review your credit. Too many inquiries can potentially have a negative impact on your FICO or credit score.
So now you have learned the lingo, asked a family member or friends for a referral. You have done some online research. You picked your top 3 and performed some interview questions. You narrow it down and make a decision to go with the lender who you feel the most comfortable with. What happens next? The process of obtaining the loan to fund the purchase the home of your dreams begins.
The lender will take a full application of you. They will acquire your credit score for the three credit bureaus, Equifax, TransUnion, and Experian. Once your lender has the basic information they need they will submit your loan for approval. The loan application will typically come back as approved however, there may be some conditions the underwriter will want before final approval. They may need additional documentation to verify your application and job status. They will also need some type of income documentation to verify. This could be paystubs, W2’s or even full tax returns. At some point, you can choose to lock your rate for your loan. This means there will be a certain number of days your rate will be locked. This will require you to complete the process before it expires. This can make the process stressful if the rates move higher than what your rate is locked in at. However, when you work with the right lender, they will have a system in place to help guide you to the completion and the funding of your loan. Working with the right lender makes the home loan a less stressful process.
We believe The Tim Bullock Team at Union Home Mortgage IS that lender. Our pledge to over-communicate the entire process while keeping our promises makes your experience the best that it can be. We look forward to getting you home.