The Top Places to Shop for a Mortgage Loan

Man pushing a shopping cart with home model put on the old wood in the public park

You want to buy a house and you know it is going to cost a large amount. That might be all that you know about buying a house for the first time. There is much more to it and you should understand more of the details. In order to get the best deal that you can, you should have some awareness of the various items that go along with purchasing a home. Even if this is not your first house, there is probably some information you could benefit from knowing. In addition to understanding the details of a mortgage, it is important to understand where to shop for a mortgage loan.

The Top Places For Your Mortgage Loan

The most common type of mortgage that you will find is a fixed mortgage. A fixed mortgage has a rate that is fixed and the agreed-upon interest rate remains the same for the entire life of the mortgage. The most common length of a mortgage is 15 or 30 year terms. Lenders prefer that you have a 20 percent down payment for your mortgage. If you cannot afford to put down 20 percent for your mortgage, the lender requires you to have private mortgage insurance (PMI). Lenders want you to have a higher credit score to qualify for a traditional mortgage.

When you shop for a mortgage loan, you should keep these lenders in mind:

Rocket Mortgage

Rocket mortgage loanRocket Mortgage has been providing quality and affordable mortgages for over 30 years. They pride themselves on their customer service. You might want to start here when you shop for a mortgage loan. This type of loan is available online only and is a self-service type of loan. They are looking for you to have a credit score of at least 620 with a minimum down payment of 3 percent. They specialize in home purchases, refinances, FHA, fixed and variable rate loans. You can find out how much money you qualify for in minutes, partially due to Rocket Mortgage’s ability to retrieve documents.

NBKC Bank

NBKC bank logoNBKC Bank allows you to completely fill out your application on the bank’s website. You are able to sign all of your documents in the application. In addition, you can track your application. They do offer an actual building for you to visit in person, but only within the Kansas City area. They have a mobile application for iOS and Androids. NBKC bank does want you to have a minimum credit score of at least 620. Also, they want you to have at least 3 percent to put down for your house purchase. They also specialize in home purchases, refinances, FHA, fixed and variable rate loans. They charge a mortgage origination fee for most borrowers.

Quicken Loans

Quicken Loans has an application that is completely online but has mortgage advisors available to you. They provide amazing customer service. They can instantly verify your employment and income for over half of the people that apply. Also, they offer mortgage terms from 8 to 30 years. They do want you to have a minimum credit score of at least 620. They want you to have at least 3 percent to put down for your house purchase. Quicken Loans also specialize in home purchases, refinances, fixed and variable rate loans. They provide FHA backed loans.

New American Funding

newamerican funding logoNew American Funding is a great way to shop for a mortgage loan when you have a low credit score because they use a manual underwriting process. They have a full range of online options available to you. You can apply online, as well as get rate quotes and upload all of your needed documents. Their services are not available in all states. They only require to have 3 percent down with a minimum credit score of 620.

Fairway Independent Mortgage

Fairway Independent mortgage logoIf you are interested in an FHA loan when you shop for a mortgage loan, Fairway Independent Mortgage may be the best lender for you. They offer a large variety of loan options. Not only can you apply for a mortgage with them online, but you can apply with their mobile app. They claim their loan application can be completed in 10 minutes. Their website is a full-service site complete with online help and FAQs. They do require you to have 3 percent down. They do not post their interest rates online, so you have to fill out the application for more details.

Citibank

CitibankCitibank is a great choice for a mortgage because they are a large scale mortgage that provides you with a wide range of products, including fixed and adjustable-rate mortgages. They are available in all states. They look at other credit data items to determine if they want to approve you for a mortgage. Citibank allows for low down payments and offers special discounts if you are already a Citibank customer. You cannot fill out your application online and they do charge application fees.

Bank of America

Bank of America logoBank of America has unique down payment and closing cost programs that can provide assistance to you. They look at alternate data elements to determine your creditworthiness. You are able to complete the entire application online. They will accept a minimum down payment of 3 percent. They do, however, charge a hefty application fee, which can fall into the $1,200 range. Bank of America is not known for their great customer service. They have a fairly high amount of complaints.

PNC

PNC bank logoPNC Mortgage is part of PNC Bank, which is a well-established bank. They do have some online capabilities, but you cannot fill out the entire application online. They offer over 2,000 branches, but they are not in every state. PNC has a large number of online tools available to you to help you estimate your payments and track the status of your application. They do look at credit data that many traditional lenders do not determine your creditworthiness. They will consider rent payments and other nontraditional data elements.

SoFi

SoFi, which stands for Social Finance, is a digital finance company that gives you an entire catalog of products, from investment accounts, cash management, and mortgages. You have the ability to fill out the entire mortgage application online. They do not require private mortgage insurance, but they want you to have at least 10 percent down. They are willing to work with borrowers that are self-employed. If you are already a customer, you can qualify for a $500 discount on the mortgage fees. They do not offer mortgages for government loans, like FHA, or even VA. They are not available in all states. Once you have a loan with SoFi, you are considered a member, which has perks such as access to special events and financial planning.

What Is A Mortgage?

You cannot begin to shop for a mortgage loan if you do not understand what a mortgage really is. I want to take a few minutes to give you some much-needed information about the basics of a mortgage. A mortgage is what you need when you want money to purchase a home. A mortgage loan and as with any loan, you pay back the money over time by making regular monthly payments.

As with all loans, the lender adds a fee to the loan, called interest, for allowing you to borrow money from them. There is a major difference between a mortgage and other loans because, with a mortgage, you are using your house or property as collateral. That means that if you stop paying on your mortgage, the lender has the right to take your house. You do not own the house completely until you pay the mortgage in full.

What Happens During The Mortgage Process?

Regardless of what type of loan you want and where you shop, the process for a mortgage loan is usually the same. One of the first steps you should take is to check your credit. This way you will know your credit score and have an idea of the type of mortgage for which you might qualify.

Once you have determined your credit score, then you can look for the right lender for your needs. This is when you should shop mortgage lenders. You may also want to consider getting pre-approved for your financing. This shows realtors that you are serious about buying a house and the amount of a mortgage for which you should qualify. This does not replace the mortgage process, this is just a letter stating that you qualify for a certain amount. Once you have taken those steps, you should begin to look for a house.

Since you have a pre-approval amount, you know what your price range is for a house. This helps you refine your search for the houses you can actually afford. This keeps you from going outside of your price range. Once you have picked out the house you want, you can make an offer. Before you make an offer or even start looking at houses, you might want to consider finding a good real estate agent. A good agent can help you determine what a good starting price might be based on the market and the area. Once your offer is accepted, the real mortgage paperwork begins. You have to fill out the application and provide all the documentation.

Income and financial information, such as pay stubs, W2s, and bank statements, are going to be needed. After all this information is collected, it goes to an underwriter who studies all the documents and the value and price of the house.

Where Can I Find A Mortgage?

When you want to shop for a mortgage loan, the key is to actually shop around for a mortgage. There are many lending options available to you when you are looking for a mortgage. You should find out as much as you can about potential mortgages. You do not have to take the first offer you find and you should wait until you have the right mortgage for you. Keep in mind this mortgage will take anywhere from 15 to 30 years to pay off, so it will be with you for a long time.

You can shop for a mortgage loan online, which would give you a large amount of money. A quick internet search will help you find all the mortgage information you need. You want to determine the amount of money you want to borrow and how much money you have to put down. Then, you want to understand the interest rate for your mortgage and what that means for your monthly payments. Also, you want to know about any fees you may have to pay. In the end, you want to understand different types of mortgages and all of the fine print.

Finding the right lender for your situation is extremely important. You can get help from Loanry. If you leave the required information in the form below, we will get you offers from reputable lenders, and from there all you need to do is compare them and apply. Start here:


What Do I Need To Know About A Down Payment?

Before you shop for a mortgage loan, you should consider how much money you have for a down payment. A down payment is the amount of money you are putting up for the house that comes from you. You are not borrowing this money from a lender. A down payment impacts how much money you have to borrow from a lender and have to pay back. I mentioned earlier that lenders want you to have 20 percent down.

If you want to purchase a $300,000 house, 20 percent of that amount is $60,000. That is how much you would have to put down from your account. The percentage goes up or down based on the total cost of your house. The larger your down payment is then the lower interest rate you might get from the lender.

If you cannot put down 20 percent, a lender wants you to have private mortgage insurance (PMI). PMI is insurance just as the name states and it gives the lender a stronger sense of security that they will not lose the money they are letting you borrow. You have to pay for the insurance so it will add to the cost of your monthly mortgage payments. It is possible for you to find lenders that will allow you to borrow money even if you do not have 20 percent to put down.

Should I Be Pre-Approved?

Before you shop for a mortgage loan, you want to consider getting pre-approved. Keep in mind, a pre-approval is different from a pre-qualification.

A pre-approval is when the bank approves you for a set amount of money for your mortgage. The lender gives you a letter stating how much you are approved. It gives real estate agents and sellers an idea of how much you can afford. When you get pre-approved for a loan, the lender does a hard hit to your credit. It also shows that you are serious about purchasing a home. This shows sellers how much you can afford to pay for a house. If they have your offer with a pre-approval and another potential buyer with an offer that is not pre-approved, the seller may pick your offer over another.

A pre-qualification is a rough idea of how much money for which you may qualify. This is not a guarantee of how much you will get from a lender, but it is an idea of how much you can get. This type of qualification is only a soft hit to your credit. It is not a deep look into your finances. It is free to be pre-qualified for a mortgage.

Conclusion

This article contains a lot of information, including the best lenders to shop for a mortgage loan. There is a lot of information available to you and you should learn as much of it as you can. When you want to purchase a house, it is your responsibility to be well informed. When all is said and done, you are going to be responsible for making the mortgage payments and maintaining your house. You want to make sure that you can afford to do both of those things by first making sure you know all your mortgage options. Second, you need to make sure that you can afford to pay the mortgage once you have agreed to do so.

A mortgage is a binding contract and you are legally responsible for making the agreed-upon payment amounts on time. You should do all that you can to ensure you are able to do so. If you do not think you can afford a mortgage than it is probably not the right one for you.