Best Mortgage Loans & Tips 2020

When you buy a home, you’re in it for the long haul. You’ll have a mortgage payment for 15, 20 or 30 years, so it’s smart to shop around to find the best mortgage lenders out there.

 

How to look for a lender

Finding a mortgage lender involves more than just getting a good interest rate; you want to work with the best mortgage companies, staffed by professionals who will guide you through the process.

Below are five tips to help you hunt for the best mortgage lender.

  1. Get your credit score in shape. The higher your credit score, the more bargaining power you’ll have.
  2. Know the mortgage lending landscape. We’ve done some of the homework for you below.
  3. Get preapproved for your mortgage. Boost your chances of having your offer accepted by getting preapproved.
  4. Compare rates from several mortgage lenders. You can search for the best mortgage rates online.
  5. Ask the right questions and read the fine print. Find out about requirements and fees, including costs beyond principal and interest payments.

All the loan programs (with the exception of first-time homebuyer assistance programs) are available to all homebuyers, whether it’s your first or fourth time purchasing a home. Many people falsely think FHA loans are available only to first-time buyers, but repeat borrowers can qualify as long as the buyer has not owned a primary residence for at least three years leading up to the purchase.

Choosing the loan that’s best for your situation relies primarily on your financial health: your income, credit history and score, employment, and financial goals. Mortgage lenders can help analyze your finances to help determine the best loan products. They can also help you better understand the qualification requirements, which tend to be complex. A supportive lender or mortgage broker may also give you homework—targeted areas of your finances to improve—to put you in the strongest position possible to get a mortgage and buy a home.

 

The Bottom Line

No matter which loan type you choose, check your credit report beforehand to see where you stand. You’re entitled to one free credit report from each of the three main reporting bureaus each year through annualcreditreport.com. From there, you can spot and fix errors, work on paying down debt, and improve any history of late payments before you approach a mortgage lender.

It can be advantageous to pursue financing before you get serious about looking at homes and making offers. Why? You’ll be able to act more quickly and may be taken more seriously by sellers if you have a preapproval letter in hand.