Selecting a Mortgage Company
The first thing to do when selecting a mortgage company
is to determine whether to deal with a mortgage broker,
loan originator, or a portfolio lender. Each has its
relative advantages. A person with the best credit and
an existing relationship with a financial institution
may do best to stick with his or her own bank’s
portfolio lending arm; while those with some credit
flaws may wish to have more options available. Regardless
of the option, it is advisable to first check with your
local Better Business Bureau, and in the case of mortgage
brokers, with your state’s licensing division.
If the mortgage company is a publicly traded firm, then
you have the ability to look at its financial reports,
which are often available through online services or
directly from the company’s web site.
Selecting a mortgage company goes beyond simply examining
the different rates offered; it involves choosing a
reputable company, and choosing one that has a mortgage
product that will suit your own situation. If you have
some credit problems, the mortgage company offering
the most attractive interest rates will not be for you.
After determining which companies has the mortgage
products you are likely to need and checking on those
companies’ backgrounds, it may be worthwhile to
spend a few minutes talking with an officer of each
one, to determine how their process works, and how willing
they are able to work with you given your own specific
situation. Then, after you have done all that, it is
time to compare rates.
Interest rates, however, are not the only expenses
involved, and one must also consider what additional
fees, points, or commissions must be paid, and whether
private mortgage insurance will be required as a condition
of the loan.
Lastly, it is important to note that mortgage companies
are increasingly making their decisions at least in
part based on a computerized analysis, so if your credit
situation is marginal or even less than perfect, you’ll
want to choose a mortgage company that is more flexible
in its application of the standards and rules of underwriting.