October 19, 2018
How do you find the right lender for your home loan needs? If you seek an FHA mortgage, the first step is to find a participating lender who is willing to write an FHA loan.
After that, the process of weeding out has a lot to do with finding the services you need, the most competitive interest rate, and a lender that has the kind of loan you need.
FHA Lenders: They Are Not All Alike
The reason it’s important to shop around for an FHA lender includes finding one that is willing to do the kind of mortgage for the property you want to purchase. Not all participating lenders offer all FHA loan products.
Depending on your housing market, certain kinds of mortgages may not be popular and may actually be viewed as a financial liability for the lender offering such loans in that market.
Those who seek FHA mobile home loans, FHA condo loans, or FHA construction loans such as the FHA One-Time Close mortgage will need to ask each prospective lender if those loans are available.
It’s not that those particular loans are scarce, but in certain markets the demand may be elsewhere. Check to see what the lender can do for you.
FHA Lenders Don’t Offer Identical Interest Rates Or Other Terms
Another reason why it’s good to shop around for an FHA lender is that the interest rates and loan terms you are offered will vary.
Some lenders may be willing to give you a lower interest rate, especially if those lenders are competing for your business with other financial institutions in a busy housing market.
It’s also important to remember that your FICO scores and other financials will play a role in what rates and terms you are offered. Are you having trouble finding a lender willing to work with your credit scores and related data? Keep looking, but in the meantime keep working on reducing your debt ratio and improving your record of on-time payments.
Don’t accept the first set of interest rates and terms that come your way without checking elsewhere to see what might be possible.
And remember that interest rates can fluctuate daily; when you are researching those mortgage rates and return to one lender or another later the rate may change in the meantime. This is normal.
Check With Other House Hunters And Real Estate Agents
Some lenders may have a reputation in your chosen housing market. Do you know what that reputation is? It’s also good to check user reviews of websites, on social media, etc. to see what others are saying about the lender you’re considering.
Never underestimate the power of a good or bad review to change your mind about proceeding with a service or service provider. Investigate the local buzz about a company or service to make a more informed decision about which company to choose.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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