What to Look for in a Mortgage Lender

mortgage lender signing papers

There are a lot of choices you have to make when buying a new house. With all the excitement of touring homes and creating wishlists, choosing a mortgage lender may not be at the top of your mind—especially if you’re still in the beginning stages of your home search.

That said, finding the right lender can make or break your homebuying experience—and selecting your lender early on can give you peace of mind as you shop for a home. Below, we discuss some of the traits you should look for when choosing a mortgage lender.

Why should you consider multiple lenders?

According to research completed by Freddie Mac, homebuyers who consider the mortgage rates of multiple lenders save an average of $1,435 over the course of their loan compared to homebuyers who strike a deal with the first lender they contact. In addition to receiving a better interest rate, buyers can end up paying less in fees when they do their research before choosing a lender.

Another benefit to shopping around for a mortgage loan is ensuring that you find a lender who is able to provide the support and guidance that you need. The right mortgage lender should be available to answer any questions that you may have throughout the homebuying process.

How many lenders should you contact?

While there is no limit to the number of lenders you can contact to ask about services and rates, you should be mindful of how many mortgage applications you are filling out.

When you apply for a mortgage, the lender will need to check your credit. Too many hard credit checks can have a negative impact on your credit score, which can make it more difficult to secure a loan moving forward. According to the Fair Isaac Corporation—the company behind FICO® Scores—you can apply for multiple loans within a 30-day period without affecting your credit score.

However, you can usually get an idea of a lender’s mortgage products without filling out an application. Most lenders are able to provide you with an informal estimate of what your loan may look like based on basic financial information that you provide, such as your income and desired mortgage amount.

4 factors to keep in mind when choosing a mortgage lender

1. Interest rates

Studies show that when you shop around with multiple lenders, you are more likely to secure a favorable interest rate. To begin shopping for a mortgage, do some research into current mortgage rates. Freddie Mac’s Primary Mortgage Market Survey® tool can show you how average interest rates have changed over time.

Interest rates will vary from lender to lender, and the type of interest rate you’re able to qualify for largely depends on factors such as your credit score and income. Speak to a few different lenders to compare their estimated rates.

2. Types of mortgages offered

Another key factor to choosing a mortgage lender is considering what types of mortgages they offer, and whether or not these mortgages suit your needs. Depending on your situation, you may be looking for a loan that requires putting little or no money down or a loan that is specifically designed for first-time homebuyers. If you’re an active military service member or a veteran, a VA home loan may be right for you.

At Cadence Bank, we offer several types of mortgages, including:

  • Conventional mortgage loans
  • Mortgages for Medical Professionals
  • Adjustable-rate mortgages (ARMs)
  • Construction to Permanent and Renovation to Permanent loans
  • FHA, VA and USDA loans
  • Right@Home
  • Refinanced mortgage loans

Not every lender will offer the same types of mortgages, so be sure to do your research and determine which type of loan is best for you before deciding on a lender. If you need help figuring out the pros and cons of different mortgage options, our team is happy to answer your questions.

>>Related Reading: Fixed vs. Adjustable-Rate Mortgages

3. Approval process

All lenders follow a slightly different process in terms of prequalification. While most lenders are happy to give you an overview of the factors that affect mortgage approval, you will not know for sure whether or not you qualify until you fill out a formal application and the lender has a chance to review your finances.

If you’re considering multiple lenders, be aware that the approval process may vary for each. Many lenders allow you to file for preapproval for free, but others may charge an application fee.

Before moving forward with a loan application, be sure to ask your lender the following questions:

  • What credit score is required to qualify for a loan?
  • What documentation do I need to provide as part of my application?
  • Are there any fees associated with filling out an application?
  • How soon can I expect a decision on my application?

>>Related Reading: What Credit Score Is Needed to Buy a House? And Tips to Bring Up Your Credit

4. Quality of service

When you work with a mortgage lender that provides clear communication and personalized customer service every step of the way, you can ease some of the frustrations associated with the homebuying process.

As you consider different lenders, look for a company that provides transparent information about their entire lending process. In addition, take note of the lender’s response times. Things move quickly when you’re buying a home—especially when it comes time to close—and you want to ensure that your mortgage officer will be available to answer your questions whenever you need them, especially if you’re a first-time buyer.


Learn what makes Cadence Bank’s mortgage team stand out

Choosing a mortgage lender is a big decision, and you want to make sure that you’re working with someone you can trust.

At Cadence Bank, we take the time to understand your needs and work with you to find the right mortgage product. Our team of experienced mortgage loan originators are here to guide you through the homebuying process. Get in touch with us today to find out how we can help you purchase your dream home.


This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.

By: Cadence Bank on Dec 2, 2021

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