Choosing the Right Lender

1. Start by Exploring All Your Options

Don’t settle for the first lender you come across. Different lenders offer different rates, loan types, programs, and levels of customer service.

Consider exploring:

• Local banks and credit unions
• Online mortgage lenders
• Mortgage brokers (who shop rates on your behalf)
• National lending companies

Cast a wide net—you may be surprised how much offers can vary.

2. Compare Interest Rates—But Look Beyond Them

Interest rates matter, but they aren’t the whole story. When comparing lenders:

• Look at the annual percentage rate (APR), which includes fees.
• Ask about discount points, which can lower your rate.
• Compare loan estimates (LEs) side by side.

A low advertised rate doesn’t always mean a cheaper loan. Always compare the full picture.

3. Understand All Fees and Costs

Every mortgage comes with closing costs, but how they’re structured varies widely by lender. Ask each lender:

• What are the origination fees?
• Are there any application or underwriting fees?
• Are the fees fixed or negotiable?
• What is the estimated total for closing costs?

Transparent lenders will clearly explain all expenses upfront.

4. Ask About Loan Types and Programs

The best lender for you will offer loan options that fit your financial situation. Common programs to consider:

• Conventional loans
• FHA loans
• VA loans
• USDA loans
• First-time homebuyer programs
• Down payment assistance programs

A lender who listens and matches you with the right product—not just the fastest sale—is a lender worth considering.

5. Check the Lender’s Reputation

Before committing, look into the lender’s track record.

• Read online reviews.
• Ask your real estate agent about their experiences.
• Look for testimonials or recent customer feedback.

A reputable lender communicates clearly, meets deadlines, and resolves issues promptly.

6. Ask About Pre-Approval Strength

Not all pre-approvals are created equal. A strong pre-approval can make your offer more competitive. Questions to ask:

• Is it a true pre-approval with verified income, assets, and credit?
• Does the lender offer pre-underwriting (a more robust version)?
• How long is the pre-approval letter valid?

A strong pre-approval can give you an edge in a hot market.

7. Evaluate Their Communication Style

Clear, reliable communication can make the difference between a smooth closing and a stressful one. Look for a lender who:

• Responds in a timely fashion
• Explains things clearly
• Communicates by your preferred method (email, phone, text)
• Keeps you informed at every step of the process

If communication is poor in the beginning, it won’t improve later.

8. Consider Local Expertise

Local lenders often understand the nuances of your regional market better than national companies. They may offer:

• Insight into local taxes and regulations
• Strong relationships with local appraisers
• Faster response times
• More personalized service

This can be especially valuable in competitive markets.

9. Don’t Be Afraid to Negotiate

Many buyers don’t realize that some mortgage terms are negotiable.

You can ask lenders to:

• Match or beat another lender’s rate
• Reduce or eliminate certain fees
• Offer lender credits toward closing costs

The worst they can say is no—so it’s always worth trying.

10. Choose the Lender You Trust

Ultimately, the right lender should make you feel confident and supported. If something feels off—hidden fees, unclear answers, or pressure to rush—you can always walk away.

A great lender will:

• Act as a partner
• Offer clear guidance
• Help you stay within your budget
• Work to ensure a smooth, on-time closing

Trust your instincts as much as the numbers.

Final Thoughts

Choosing the right lender is a crucial part of the home-buying journey. By taking the time to compare options, ask the right questions, and understand all costs, you’ll be in a much stronger position as you move toward closing day. With the right lender by your side, the entire process becomes simpler, clearer, and far less stressful.