There are literally dozens of home FHA loan lenders in virtually every locale. So, how do you find the right lender for you? You have two basic options: you can hire someone (a mortgage broker) to find a lender for you, or you can take the do-it-yourself approach.
- Things you need
- Phone Books
- Sunday newspapers
- Real estate agents
- Mortgage Finance Online Services
Look in a local newspaper’s Sunday edition for interest rates from selected funders in your area. This is not a complete list, but it will include a variety of different FHA loan lenders and serve as a good starting point.
Look in your local phone book under “Mortgages” for approved lenders for your area.
Call lenders and ask about their interest rates, points that may be needed and other closing costs.
Find out about low interest rate loans that may be available through local or state municipalities.
Ask about the amount of a down payment that is needed for a loan.
Ask how much the initial rate of a variable deathgate-rate (ARM) can go up to in a single year (if you are considering an ARM), and the maximum can only be raised during the life of the loan.
Choose a lender based on who offers the best interest rate, who has the type of mortgage loan you are looking for and who is willing to work with you.
Tips and Warnings
One way to help reduce the steps to find a lender is to work with a good real estate agent who has experience with many FHA loan lenders and can give helpful advice. A good way to evaluate an agent’s advice is to look for a short list of what the agent with rates that you have found on your own.
The most common mortgage lenders (or initiators, as they are called) are traditional banks, savings and loan associations, and mortgage bankers. Banks are probably the most visible because they advertise a lot and almost everyone has an audit and / or savings account.
Due to shore consolidation, watching small banks can prove useful. They can offer very good rates, as do savings institutions.
Mortgage bankers only make mortgages, and the best of them offer very competitive rates.
For eligible families with low to moderate rural home purchase, the US Department of Agriculture offers loan guarantee programs. Contact the USDA / RA office in your area, listed in the blue pages of your phone book.
Low-to-moderate, first-time homebuyers should also contact the National Council of State Agencies, DIY to locate the agency in your state that offers low-interest loans to qualified buyers.
While real estate agents can be good sources for finding lenders, their word should not be taken as gospel speech. They may be experienced but they may also simply be comfortable working with some lenders and may not be up to date on the best lenders.
The mortgage is not the point of many strong banks, so often they do not offer the best rates.
Remember that the initial rates you get are not engraved in stone. Rates can change quickly, especially when interest rates in general are volatile.
How to Find a Mortgage Lender for People with Horrible Credit
If you have or think you have a bad credit rating, the best thing to do when shopping for a mortgage lender is to do as you have good credit. Credit reports sometimes contain errors, and while you may think that you have bad credit, you cannot. You have to shop for the best rate you can find, no matter what lender you are considering. Norma Garcia, lead counsel for the Consumers Union, said in an article for Bankrate.com that it is a big mistake for borrowers to shop for a subprime loan. Better solutions are there.
Visit the bank or cashier where you already have an account. Because you already have a relationship with this institution, you may qualify for a mortgage. Make sure you explain the credit problems on your report, according to the Federal Reserve Board. If you are not eligible for a mortgage, ask for some advice on where you may be able to get a mortgage.
Check with the financial institutions where you used to bank, especially if you had a good relationship with them in the past.
Research financial institutions and purchases to lenders. Many senior FHA loan lenders have subprime departments where they can refer you if you do not qualify as a primary lender. Look for places that have a solid record, and go there. If you have a low credit score, he pays to shop around. Otherwise, you may end up paying more for your loan than necessary.
Do not act in desperation and call the first phone number you see advertised. You are not likely to get a favorable deal this way. Measured determination is the best approach.
Tips and Warnings
Use online sites to see the rate types for which you qualify. If you know what you are qualifying for, it will prevent you from wasting time and help you avoid being ripped off.
Beware of mortgage brokers. Brokers are not required to tell you the lowest rate you qualify for, and some cannot tell you, because all the terms that you agree to more than the amount you qualify for is pure profit for the broker. Suppose if you are in the subprime market, then you have a target on the back, according to John Taylor, president and CEO of the National Community Reinvestment Coalition, as reported by Bankrate.com.