You're ready to buy a home and you have spent endless hours searching for the right house in the right neighborhood. But have you found the right lender?
Buying a home is the largest financial decision most people will make in their lifetime, yet many don’t do much research when selecting a lender. Not only can choosing the right mortgage professional save you thousands of dollars in fees, but working with someone you trust can give you peace of mind during a sometimes intimidating process.
Most lending professionals fall into two categories: mortgage loan officers and mortgage brokers. A loan officer works directly for a bank or mortgage company, while a broker works independently and requires licensure. Because loan officers offer their institution’s own loan products, they often have more say-so in the approval process. Brokers, on the other hand, generally work for themselves and can offer mortgage programs from multiple financial partners, but have less input into the approval process and control over the turnaround time. Both loan officers and brokers are able to offer competitive rates.
A great way to begin your search for the right professional is to ask friends or co-workers who have recently purchased a home for recommendations. Then, talk to a couple of local loan officers and brokers. Don’t forget your local credit union if you are a member. Questions to ask include:
- How long have you worked as a loan officer? A loan officer who has worked more than three years, has closed many types of loans and works with first-time homebuyers—if you are one-- will have more valuable knowledge and expertise.
- What loan products are you most familiar with? It is important to choose a loan officer who is familiar with products that suit your needs.
- How long does it normally take to close a loan? A normal closing period is 45 days.
- What fees will be charged? Ask about fees up front so there are no surprises later. Reasonable costs might include 3 percent to 5 percent of the loan amount.
Once you narrow down your prospects, pick one or two loan officers and ask them for a good faith estimate (after October 3, this will be known as the Loan Estimate). Compare costs, timeframes and your own perceptions about the loan officers to decide who will be the best fit for you.
And if you are considering applying for the North Carolina Housing Finance Agency’s NC Home Advantage MortgageTM with down payment assistance, our preferred loan officers across the state are experts.
Remember that a good loan officer can make your home buying experience a positive one today and may also be able to save you thousands of dollars.