Once you have a basic idea of what kind or kinds of loans you’d like to consider, it’s time to start talking with lenders.
Contact several different lenders — it’s helpful to get to know a few different loan officers. Different lenders also offer different kinds of loans. You want to explore your options in greater detail. Ask questions to help you get a better sense for what kind of loan might be the best choice for you.
What to do now
Talk to your network of advisors — friends, relatives, or others whom you trust — about how they chose their mortgage lender
Ask your advisors: What were the criteria that were important to them? Are these criteria also important to you?
- Ask for recommendations. Your advisors might recommend a specific lender or loan officer, especially if the advisor lives near you. Or they might recommend a method for finding a lender.
- Don’t just ask for names and numbers. Ask your advisors why they liked a particular lender or loan officer. What was important or comfortable for them may not be important or comfortable for you.
- A housing counselor can also be a good resource to help you figure out how to identify lenders.
Make a list of potential lenders
In addition to your advisors’ recommendations, there are many ways to find potential lenders. Contact your local bank or credit union and others that serve your area.
Contact at least three lenders on your list
Don’t stop with just one lender! By exploring your options with multiple lenders, you get more information about your options and get a sense for which loan officers you might feel most comfortable working with. Call each lender to set up an appointment to meet with a loan officer.
At the appointment:
- Share the basic facts about your situation and the kind(s) of loan you are considering.
- Ask the loan officer whether your plan makes sense to them, or whether they might recommend something a little different. If they recommend something different, ask why.
- Ask the loan officer to show you the interest rate, APR, estimated fees, and monthly payments for a couple of different loan options.
- Ask the loan officer to look at your documents and help you understand whether there are any reasons you might not qualify for the loan options you have discussed.
What to know
You’ll get the most value out of these conversations if you bring documentation with you
Lenders have very specific guidelines about how they count and document your income, assets, and the source of your down payment funds. An experienced loan officer can help you spot potential issues and suggest ways to address them. If your application might be complicated – for example, if you are self-employed – it’s best to find out sooner rather than later. Seek out lenders who are willing to go over the details with you.
You can decide whether to allow a lender to check your credit
A loan officer may ask for permission to check your credit. Knowing your credit score allows the loan officer to give you accurate pricing information about different loan options. An experienced loan officer can also help you check your credit report for errors. However, a lender’s credit check can show up in a future credit report and can result in a slight dip in your credit score. Within a 45-day window, you can have multiple lenders check your credit without any additional impact on your score. Learn more about what to consider when deciding when to allow a lender to check your credit.
You can work with either a lender or a mortgage broker to get a mortgage
You can meet with both types of companies at this stage to get a feel for both options. Learn more about the difference between a lender and a mortgage broker. For simplicity, we use the term “lender” or “loan officer” to refer to both lenders and mortgage brokers.
How to avoid pitfalls
Only work with loan officers who make you feel comfortable asking questions
A loan officer’s answers should make sense and help you understand your choices.
- If a loan officer makes you uncomfortable, can’t answer your questions, or is too pushy, look for another lender that is a better fit.
- As you move through this process, always make sure to check that the paperwork you receive matches what the loan officer tells you. If it doesn’t, ask questions. If the loan officer is unable to answer your questions, consider working with a different lender.
- You can check to see if a loan officer is authorized in your state. Most are listed in this.
Keep your options open
Don't decide on a lender at this stage! Wait until you have specific loan offers that you can compare before choosing a lender. You’ll get the best deal that way.
Credit discrimination is illegal
Under the Equal Credit Opportunity Act, it’s illegal for lenders to base credit decisions on certain factors such as race, religion, marital status, national origin, receipt of any sort of public assistance, sex, or age (as long as you are old enough to enter into a contract). Learn about the different kinds of loans available and contact a variety of lenders, including local banks or credit unions. .