Politics and Business
Five Tips to Find the Best California Mortgage Lenders In 2020
When it comes to your home mortgage, deciding on which lender you should go with will be the most complex decision you will make. It is important to understand that once you choose a lender, you will be stuck with the mortgage for quite some years, therefore it is imperative that you pick your lender carefully after serious consideration. Another point you should understand is that when you are looking for the best financial mortgage expert, you quite often end up selecting the most skilled salesperson, as the people selling mortgages are salespeople.
Currently, California has the second-highest average mortgage debt, just behind Washington. Approximately a third of people buying homes are people buying it for the first time, and as a homeowner probably the most important decision you will make is to choose the correct mortgage. This decision is especially important because not only does the mortgage allow you to purchase your own home, it will probably also be the biggest loan you will ever take in your lifetime. 2020 is a good time to take out a mortgage loan as the mortgage rates are at their lowest, and the epidemic of the coronavirus is further pushing down the rates. So if you are looking to take a mortgage loan, use the tips discussed in the following paragraphs to find the best California mortgage lenders for 2020.
Consider using the services of a Mortgage Broker
A mortgage broker makes money by facilitating a deal between the homeowner and the lender, so essentially, they are middlemen. A mortgage broker is ideal for you if you want to save time and energy, and you do not mind spending a little money. A mortgage broker also saves you the tedious process of conducting mortgage research and submitting applications.
The fees of a mortgage broker range from 0.5% up to 2.75% of the total financed amount by the mortgage. They provide many advantages such as saving you the time and energy required to find lenders, but they have their disadvantages too. A mortgage broker is a middleman and their profits depend on arranging the deal between the lender and the homeowner, thus they can potentially link you with a lender that promises them the highest profit margins.
Finding the right broker may also be challenging, but researching into the right areas can help you land the best one. These brokers also vary from place to place, so if you’re looking for a mortgage broker Los Angeles bound, for instance, you should ideally look for someone who uses a combination of knowledge and the latest technology, as well as someone who has ample experience with this, since the competition is high in the area.
Consider different types of Lenders
There are many options for homeowners to choose from when choosing what type of lender they want – big and small. Borrowers can choose between online-mortgage lenders, local banks, credit unions, and big retail banks. Local banks are suitable for you if you need to get the mortgage quickly as the decisions in local banks are made in-house. Local banks also provide individual attention and assistance that is personalized due to their accessibility. But on the flipside, local banks can be less convenient due to the potential lack of resources like mobile applications and online tools.
Big banks offer the credibility and competitive rates that the local banks cannot offer. Big banks also offer service and ease of service that cannot be matched by local banks due to the resources at their disposal. The big banks, however, have stricter credit restrictions and are less likely to approve applications that do not have ideal credit. Another good option is the online mortgage lenders that offer the most convenience and low mortgage fees and rates. However, you need to be careful as there is the danger of being scammed online.
Take suggestions from friends and family
While brokers can be motivated by profits, you can get unbiased and honest opinions from relatives and friends who have recently gone through the process of taking a mortgage. You should ask them in detail about the lender they utilized and the type of service they were offered. In case your financial situation matches theirs, this information can be utilized by you to negotiate and get terms similar to what they got, and that is suitable and favorable for you. By consulting your friends and relatives, you can find a lender that has the most valued trait of them all – trust. A lender whom you can trust is a big asset as they will help you find just the right home, loan terms that are favorable for you, and this will make the experience of buying your home much more seamless.
Inquire about the reputation of the lender
Regardless of where you get to know about the lender, it is essential for you to conduct an independent background-check on the lender. There are certain things you can do to conduct safety checks on the lender. For instance, if you manage to acquire the names of the previous clients of the lender, you can talk to them. Almost all lenders have an online presence these days in form or another, and online presence also gives you a chance to read their online reviews. Online reviews also potentially provide you with the chance to interact with the people who have written the reviews.
Make sure your documentation is complete
Paperwork and documentation are a very important part of the mortgage process, and sometimes the omission of little things can become the cause of rejection for your mortgage application. You need the following documents that are essential for the mortgage application process:
- Copy of the credit report
- Tax returns
- Bank statements
- Asset statements
- Photo ID
- Detailed renting history or detailed purchasing history
- Pay stubs (W2s, 1099s, etc.)
Applying for a mortgage is a tedious and stressful process that requires focus on multiple aspects. However, knowing what you need to look out for is a step in the right direction that’ll make the entire process much easier.
What other steps can help simplify the process of choosing a mortgage lender in California? Let us know in the comments below!