Nowadays, most people choose to finance their homes. In fact, the 2017 NAR Home Buyer and Seller Generational Trends report shows that 98% of buyers under the age of 36 financed their homes. This is compared to 68% of people between the ages of 62 and 70. With today’s economy, home loans are generally the only way to go. Fortunately, many financial institutions offer home loans with fair rates, allowing young people to become homeowners. But how do you find the right home loan? This article is going to cover a few ways to narrow down your choices when it comes to choosing a lender.
Which Type of Lender Do You Want?
Deciding which kind of lender you want to work with is a great place to start. There are a lot of different lenders to choose from, each one offering their own unique services. Generally, people start by choosing between big and small lenders. While big lenders have plenty of home loan services to offer, you may face poor customer service and impersonal attention. On the other hand, smaller lenders, like credit unions, can offer a more personalized service. Not only do credit unions take the time to get to know each one of their members, but credit union rates are generally low as well. Overall, it’s important to start your decision-making process by deciding which kind of lender you’ll want to work with.
How Do Your Potential Loans Compare to Each Other?
Once you start meeting with lenders and gathering a list of potential loans, it’s important to compare them to each other. Oftentimes, lenders will present prices in a way that make them seem like a better option, but they may have higher fees. So it’s important to really compare potential loans and not base your decision off of how the lender presented the prices. Additionally, you may want to consider a lender that specializes in your type of situation. There may be loans better for first-time homebuyers or those who want to build a home themselves. It’s important to shop around and really gather a good list of potential loans so you can compare them and see which is best for you.
Which Loans Have Your Friends Chosen?
This may seem silly, but it can be beneficial to talk to people you know about their home loans. Whether it’s family members, friends, or even your realtor, knowing about someone else’s experience with a particular lender or loan can help make the decision easier. If someone absolutely raves about the lender they chose to work with, it can’t hurt to check it out. While recommendations shouldn’t be the foundation of your final decision, it can help get you started or narrow your list down.
Finding the right home loan can be a lengthy process. But it’s important to take as much time as needed so you don’t find yourself stuck with a loan with high fees and unrealistic rates. In the end, it’s important to trust your gut and choose the lender you think can provide you with the best service possible.