Compare Reviews of Mortgage Companies

Brand-name mortgage lenders do more business than new mortgage companies because people recognize their name. Name recognition often leads consumers to believe the lender is honest and competent. Whether you go with a brand name or a lesser-known company, check out its reputation before you sign.

• Number of loans in default: If a mortgage company has a high default rate, it might be engaging in risky practices, like approving loans that people can’t pay back. It’s not in your best interest to do business with an indiscriminate lender because you could end up with serious financial problems.
• Look for predatory lending complaints: An unknown or newer business may be perfectly legit, but it also may be a scam. Check out complaints to find out whom you’re dealing with.
• Check out customer feedback online: Online reviews aren’t always accurate, but if a lender is getting more positive feedback than negative or vice versa, it can give you an idea of what you can expect. It’s also important to check out how a complaint has been resolved if that information is available.

There are more financing options than ever in the digital age. If a mortgage lender only has a limited number of options – only fixed-rate mortgages, for example – you might miss out on opportunities that could save you money in the long run.

• Online financing options: If you’re comfortable using a computer for financial applications, you can comparison shop and apply for mortgages via some lenders’ websites. Just make sure your personal information is encrypted and that mortgage applications are legitimate.
• Adjustable vs. fixed rate mortgages: The type of mortgage you pursue depends on market conditions. If interest rates are likely to rise, you may be better off with a fixed-rate mortgage, but if they are expected to fall, an adjustable mortgage could save you money. It’s essential to understand the worst case scenario on an adjustable rate loan – the highest your payment could rise – to make sure you are prepared.
• Potential obstacles: The type of mortgage you may qualify for depends on your credit history and credit score. Find out what you are likely to qualify for before you start looking, then approach mortgage lenders who offer the options you’re interested in. Reputable mortgage lenders can advise you on steps to take so you’re eligible for the best loan terms.

The mortgage company your sister used last year is often more trustworthy than the one you found via a Google search. The company you found on Google may be perfectly fine, but if you don’t know anybody who used it, you can’t verify its quality like you can when asking friends and family.

• Ask for specifics: You may be looking for something different than what your family members or friends wanted. Find out what they liked about the companies they recommend.
• Get a balanced picture: Ask your friends and family to share both the negatives and the positives in their experience so that they don’t give you an overly positive picture.
• Check out referred companies on your own: Don’t commit to doing business based on a personal referral alone. Use it as a starting point to investigate companies and choose the one that is best for you.

Depending on your credit, you may not qualify for the most favorable loan terms. However, your mortgage company should do its best to get you the lowest interest rate possible.

• Ask your financial advisor about interest rates: You should have an idea of what standard interest rates are prior to talking to a mortgage broker. If you’re offered a rate that is much higher than average, find out why.
• Comparison shop: Talk to several different mortgage companies. Find out what interest rates each one offers and choose the company that gives you the best deal. It’s smart to check out different types of companies such as a credit union, a big bank, a community bank and a mortgage banker to compare your loan options.
• Learn about pre-payment options: Determine how much you can save any money by paying your mortgage off early. If you can, consider doing so in order to keep interest rates as low as possible.

Getting the loan is only the first step. You will also need to understand how and when to pay it back, what interest rates and fees you’re looking at and what the consequences are if you are late with your payment.

• Find out the payment schedule: If you have graduated payments, which go up periodically, you need to know it in advance so you aren’t hit with an unpleasant surprise down the line.
• Put late fee amounts on a post-it note: Give yourself a visual reminder of how much it costs you to be late so that you make your payments on time.

In addition to your home loan, you’ll need to pay homeowner’s insurance costs and property taxes on the home. Some mortgage lenders include these expenses in your monthly payment so you don’t have to worry about them.

• Get your home appraised: Find out how much your property taxes are likely to be, then ask your mortgage lender if a specific amount can be included in your monthly payment.
• Open your own escrow account: If your mortgage lender does not take care of escrow for you, open your own account and put money aside each month so that you have the funds when the insurance and tax bills are due.
• Ask about fees: If your mortgage lender gives you a choice about how to handle escrow and related expenses, find out if there’s an extra fee for handling it yourself.