Search and Find

Austin's Lender Guide

Finding a lender:

There are a virtually limitless number of potential banks and lenders from which you might borrow money for your new home.  Below is a list of some types of lenders and their advantages:

• Traditional banks or credit unions are a great place to start looking.  In fact, your primary bank or credit union, where you have your checking or savings account, may be just what you are looking for, especially if you regularly visit your bank and have relationships with people in the banks.  As with so many things in life, networking and relationships are the number one way that business gets done.

So, regardless of whether you ultimately choose them as your mortgage holder, go in and talk to a loan officer at your bank or credit union.  Fill out and application if they ask you to; it will not bind you to them as your lender.

• Online banks can be a great resource too.  Make sure to check out their credibility taking out a loan from them though.  If you do find one that is reputable, it may save you quite a bit of money in the long run, as online institutions often offer rates which are reduced compared to those of traditional banks in order to increase business and lure customers who may be more skeptical of institutions without a physical presence.

Look for customer referrals and opinions in forums online.  Other customers’ experiences can be the best indicator of your own future experiences.

• Another option is mortgage brokers.  Like banks mortgage brokers are available in both the traditional and online variety.  The benefit of these services is that you can fill out one application and the broker, who works with many different lenders, shops dozens of lenders for the best rate and fit for you and your situation.

The broker makes his money by marking up your loan, but you may still save money due to the competition from a wider assortment of lenders and brokers typically get better (i.e. wholesale) rates than the individual home buyer.

NOTE: You should ALWAYS get multiple offers so that you can choose the best one from among them.  Even if your first offer seems terrific and is better than you had originally though you might get, get at least one more offer.  If your first offer was better than you thought, your second might very well be too, and if you are surprised then you may have an overly dim view of your credit history.  

ALSO, with multiple offers you can force your potential lenders to bid for you as a customer.  Tell the lender with the higher offer, that you have a better offer and ask them why you should borrow from them.  They may very well offer you a better rate, matching or beating your previous best.  Don’t be afraid to use whatever leverage you have.

Continued: Analyzing the lender’s offer... page2