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Home financing lenders: how to find, compare and research mortgage lenders

Home financing lenders include major and local banks, credit unions and thousands mortgage brokers across the country. The best lender for you depends a lot on personal preference.

Home financing lendersHome financing lenders include major and local banks, credit unions and thousands mortgage brokers across the country. You want to choose a lender that offers you a good deal and that you feel comfortable. The lender best for you depends on your personal preference and situation.

Mortgage banker vs mortgage broker

Whether you're buying a home for the first time or you're an experienced property owner, it never hurts to do a check the background and reputation of home financing lenders with whom you may do business. It also helps to understand the difference between a mortgage broker and a mortgage banker.

A mortgage banker typically orginates and services your loan. For example, if you get a mortgage through Wells Fargo, it will be the company you deal with throughout the life of your loan. However, if you opt to use a mortgage broker, he or she will match you with the best home financing lender that matches your needs. That lender may use another company to service its loans. It may also sell your mortgage loan to another company. While this is not necessarily bad, you may prefer to work with a home financing lender who actually holds the loan.

Ways to compile a list of home financing lenders

Before you try to decide which you think is better, a mortgage broker or a mortgage banker, you may want to compile a list of home financing lenders to investigate. Here are a few ways to find mortgage lenders:

  • Ask friends, family and co-workers for recommendations
  • Find out what home loan programs your local bank or credit union offer
  • Ask your real estate agent who he or she recommends
  • Get membership lists from national and state mortgage associations
  • Research which lenders the U.S. Department of Housing and Urban Development (HUD) work with

Lenders that partner with the Federal Housing Administration

Since 1934, the Federal Housing Administration (FHA) has offered home loan programs that insure all or a portion of your home loan, which indemnifies your actual lender against default. Since your lender's potential for loss is greatly reduced by the FHA guarantee, you're far more likely to be approved for financing. This makes the FHA a great resource for finding home financing lenders.

You may easily get a list of HUD FHA lenders in the state you want to live by going to this page of the HUD website. You may search for lenders who orginate and service their loans or look at all the home financing lenders in your area. Even if you decide not to participate in an FHA home loan program, you may appreciate that the lender works with HUD. A search for Multnomah County and Portland, Oregon results in a list of 50 lenders ranging from credit unions to mortgage brokers.

Research the reputation and practices of each lender

You can further research the reputation of each of these lenders by checking the Better Business Bureau for complaints and talking to people you know about their experiences with the lenders. You may also see if the lenders are members of state or federal associations.

Some of these lenders have information and mortgage rate calculators on their websites that can give you an idea of their programs and interest rates. You are also encouraged to talk to a representative of each home financing lender you are considering. You don't need to apply for a loan to ask questions about loan programs, like whether the lender services the loans and what you can expect after you buy your house. 

If a lender's representative pressures you into applying for a loan before you are ready, quotes you an interest rate without evaluating your credit and finances or asks for money in advance, the lender may not be reputable. If you just want a general idea of mortgage rates available, go to Reply! to compare the range of interest rates being offered by national lenders.

To learn more about the home financing process and steps you may take to be prepared to apply for a home loan and get pre-approved, go to this article. It explains how you can evaluate and improve your credit history and the financial documents lenders want to review.

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