Let’s Find the Best Mortgage Lender in Pennsylvania
Stop scrolling through Zillow listings and read this article!
If you’re buying a home right now there are several important steps you need to consider. Sure, you need to make sure your house has enough room for the dog and the kids. We’re sure you’re also thinking about having an extra room for Grandma to sleep in, too.
But there’s more to buying a home than just finding your dream home. You also have to consider the financial aspect of purchasing your dream home.
You’re going to need the best mortgage lender in Pennsylvania. At the start of your home buying process, you took the time to find the best agent, no? Well, your mortgage lender is no different.
Think of your real estate agent and your mortgage lender as equally important players of your home buying “power squad”. Your agent finds the deal and your rockstar lender makes it happen.
But how do you find the best mortgage lender in Pennsylvania? Great question. Fortunately, for you, that’s exactly what this article is all about.
Today we’re going to cover what to look for in a mortgage lender, the right questions to ask, and where you can find mortgage lenders.
So, read on and take notes. Class is in session!
Types of Lenders
Most people don’t really give their mortgage lender a second thought. In fact, most home buyers get set up with a lender through their real estate agent. But, choosing the right lender can make or break your home buying process.
That’s why it’s important that you do your own research. There are a few different types of lenders you can work with. Let’s go into them in some more detail so you can figure out which is the best fit for you and your family.
As the name suggests, direct lenders are institutions that you work with directly. This is the type of lender that everyone is most familiar with. These would be your banks, credit unions, and other financial institutions.
Working directly with your lender has its benefits. Since the bank lends out their money directly to customers, they can keep most of the loan process in-house. This means you’re less likely to get bounced around from department to department.
You’ll have one point of contact throughout the process. That means it’s easier to call for status updates on your loan application. It’s also easier for you to ask questions about your particular application.
The disadvantages of working with a direct lender can be the rates and terms. If you shop around at multiple direct lenders, you could receive approval for the same size loan from two different banks. But, when you look closely, one loan could have a significantly higher rate and different terms.
It’s important to read the fine print to make sure you don’t miss something and end up getting locked into a loan that really doesn’t work for you.
Mortgage brokers are licensed lending professionals. They have access to a number of different loan products provided by different lenders. Mortgage brokers don’t work directly with one particular lender and they get paid by commission on the loan products they sell.
Brokers are not responsible for making the decision on your loan. They also don’t have the power to determine what type of rate you’re getting. They are essentially matching you to a lender, and loan product, they think would be the best fit for your situation.
The plus side of working with a mortgage broker is that they have access to a large number of lenders and products. This means it may be easier for you to find the perfect loan to find your dream home.
The downside is working with a mortgage broker adds an extra person to the process. You’ll be communicating with your potential lender through your mortgage broker. It can make the process cumbersome if you have important questions that need to be answered.
It’s a minor inconvenience but buying your home is an important process. You want to make it as easy and stress-free as possible.
Lenders for First-Time Homebuyers
There are lenders and loan products specifically designed to help you buy your first home. These lenders are experts at the financing and paperwork side of the homebuying process.
There’s a lot to consider when you’re buying a home. And, if you’re buying your first one, it can be a bit overwhelming. First-time homebuyer lenders are pros at helping you through the process.
They will help you navigate your realtor commissions, closing costs, taxes, and title fees. You’ll also be dealing with appraisals and many other steps throughout the process. It’s helpful to have a lender with experience who can show you the ropes.
Lenders who offer these types of mortgage loans in Pennsylvania should have tons of experience and offer a face-to-face personal touch. If you’re looking to buy your first home or have any questions about these types of loans, feel free to reach out to the RH Funding team.
If you already own a home and are looking to refinance into a lower interest rate, or pull equity out of your home, you’ll want to work with a lender who specializes in that process. One of the keys to maximizing the benefits of the refinance process is minimizing your closing costs. You’ll also want to do some shopping when it comes to your rates.
Similar to the process of an original loan, different lenders have different refinance rates. You can do your own shopping to compare rates or consider working with a mortgage broker and have them do it for you.
The refinance process can also be a little trickier than applying for an original loan. Lenders may require more paperwork and do a more in-depth analysis for approval of your refinance. It’s important you work with a lender who will make the process as smooth and painless as possible.
Finding the Best Mortgage Lender in Pennsylvania
Now, you know the different types of lenders you can work with. By reading about them and which each one specializes in you should have a pretty good idea of which lender best fits your situation. The next step is to choose the best mortgage lender in Pennsylvania within the category that works for you.
Here are some steps on how to navigate that process.
1. Get Your Credit in Order
Regardless of what type of lender you decide to work with, you’re going to have to have a handle on your credit score. If you don’t know your current credit score, there are dozens of online resources that will show you your current score for free.
Lenders will look at your credit score, as well as your debt-to-income ratio. The credit score shows them what type of borrower you are. The debt-to-income ratio shows them your ability to handle your current bills and monthly payments.
If there are issues with your credit that will affect your application, your lender will talk with you about them. They may suggest working with a professional to fix your credit and get you back on track toward buying a home.
2. Make a Budget
You need to keep in mind that your mortgage isn’t the only thing you’re going to be paying for. When lenders approve you for a loan, they’re going based on your gross income. If they approve you for a loan of $225,000 that doesn’t mean you should shop for houses at that price.
Factor in other expenses like utilities, gas, groceries, daycare, etc. Then come up with a monthly mortgage payment you can afford and work backward from there.
3. Compare Multiple Lenders
We’ve already discussed shopping around and doing your research. Your mortgage professional, and your mortgage, should work for you. Compare rates and terms to find the loan and lender that are the best fit for your situation.
Getting a loan is a lot like going to the doctor. Always get a second opinion!
4. Know Your Options
There are a wide variety of different types of mortgages available to you. Especially if you decide to work with a mortgage broker. Many homebuyers think their only option is a traditional loan from a bank with 20% down.
Other agencies like FHA have made products with down payments as low as 3.5% to make homebuying more accessible. A great lender will be able to educate you on these products and help you to find one that’s right for you.
5. Get a Preapproval Letter
Most agents who are good, and serious about their profession, will require a preapproval letter. They won’t schedule showings until they know that you know how much house you can buy. It saves them time and saves you time.
Plus, you don’t want to fall in love with a house only to find out you can’t afford it. Get preapproved first. This way you start shopping in your price range right off the bat.
It will make the process quicker, easier, and a lot less stressful.
6. Read Before Signing
Read the fine print! We can’t stress that enough. Your lender will have gone over the major points of your agreement with you. But, you need to read the fine print yourself.
The last thing you want is to get surprised with extra fees or changes in rates that are going to shoot your monthly payment through the roof. Take the time, read it over, and save yourself tons of headaches in the long run.
Solving the Mortgage Mystery
Finding the best mortgage lender in Pennsylvania doesn’t have to be hard. Figure out what type of lender works best for you and then follow the steps we’ve outlined for you here. Do that, and your home buying process will be a breeze.
You’ll be in your dream home in no time!
If you have any other mortgage questions, contact the team at RH Funding. We’ve seen a thing or two in the industry and want to do whatever we can to help you on your way.
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