It sounds logical: find the lowest mortgage rate, and you’ve found your lender. But your decision should be based on more than just the lowest rate.  These are our tips for finding and choosing a lender:

1. Ask for recommendations.  In addition to family and friends, professionals who deal regularly with mortgage lenders, such as financial advisors, accountants, attorneys and realtors, should be able to provide referrals.  Your current bank or credit union can also be a good place to start if you have been satisfied with them. Ask if they offer incentives to existing customers.
2. Research and interview.  Whether you start with a list of recommendations or even with low rate quotes, you want a lender who’ll focus on your best interests.  Contact two or three mortgage professionals and ask questions about their experience and qualifications.  Do they take time to explain mortgage types, what lending terms mean in an understandable language, and what you need to know about the process, timing, and fees?  Or do you feel like they’re rushing you into making a decision?  Are they interested in your financial goals and long-term plans?  A good lender will not only qualify you for a loan but also review your credit score, suggest ways to fix low scores, and review how potential mortgage payments fit into your budget. 
3. Ask about the loan process, timing, fees and ongoing servicing.  Your lender should be able to tell you what to expect in closing costs, how long it will take to get approved, what will happen if the appraisal comes in too low or other last minute problems that might occur causing your rate lock to expire.  If you value customer service, you may want to choose a lender that does not sell your loan.  For example, Bank Mutual services home mortgages locally in Wisconsin for the life of the loan.  Your lender should help set expectations for the process, keep you fully informed, and continue to communicate and be responsive to your concerns or questions.
4. Compare, contrast, and decide.   Hopefully you’ve taken great notes throughout your research.  From rates, points and fees, to timing and servicing, compare what you’ve learned. Which mortgage is the best match with your needs?  How do the fees, points, and annual percentage rate (APR) compare?  Review your lists to ensure you have remembered every possible cost, and double-check your math.  If you were turned down by a lender, be sure to ask why so you can remedy any issues.  If you’ve done your homework, it should be easy to decide on the best lending institution and mortgage professional.

For more tips on the home buying, building or refinancing process, visit our blog at bankmutual.com/bank-of-knowledge.