While it’s not difficult to find a lender, you shouldn’t work with just any lender you meet. Finding a good lender is key, which is why you should ask your REALTOR® for a list of referrals, instead of selecting one from your quick internet search. I am happy to provide you with a list of knowledgeable lenders, who have experience dealing with all types of issues from problem properties to poor credit.
Choosing the Right Lender
In order to find the lender that’s right for you, you should interview several lenders and evaluate the following:
Are they able to explain things clearly?
Do they return your phone calls in a reasonable time period?
What’s the competitiveness of interest rates, costs, and fees?
Do they have loan programs that suit your credit profile and desired property?
Do they provide you access to a local loan approval committee that understands the kind of property you are buying?
Choosing the Right Kind of Loan
With so many different types of loans available, your lender is the best point of contact to help you select a loan program that works for you. For a summary of the three most popular loan types we see in practice (fixed loans, ARMs, and intermediate ARMs), please see below.
Fixed loan: The fixed rate loan assures your monthly payments will stay the same over the life of the loan, which is typically between 15 and 30 years. Fixed-rate loans may be best if you intend to hold the property for a long period of time, say over seven years.
ARMs (adjustable rate mortgages): ARMs may be suitable if you plan to sell or refinance your home within the next few years. The starting interest rate is typically lower than a fixed-rate loan, saving you money initially. However, it is important to understand the index, the readjustment interval, the capitalization rate, and the downside risks of an ARM before making a final decision to use this type of loan.
Intermediate ARMs: Also called hybrid loans, these loans can offer fixed interest rates for the first three, five, seven or 10 years after which the interest rate adjusts with the market every six months or year thereafter. Click here for more detailed information.
