Finding the right lender
How do you choose a Glossary Term: lender for your mortgage or refinance? In most cases, you’ll use several factors to help you decide. The Glossary Term: rates and loan products a lender has available are a consideration. But it’s equally important to select a lender who can help you find the Glossary Term: mortgage or refinance program that fits your needs.
A home loan isn’t just about getting the best rate. It’s about getting the loan that’s right for you, with no hidden fees or surprises. Your lender should be clear about what they offer, focused on your needs, and dedicated to helping you make informed decisions. They should ensure you are kept informed, prepared and confident throughout the home loan process, from start to finish. Your lender should also work well with the other members of your team, like your real estate professional, if you are buying a home.
If a prospective lender is vague about costs, unable to explain your loan options in plain language, or pushes you toward a particular loan product without clearly explaining how it meets your needs, you may want to keep looking.
Available exclusively at Bank of America, our Clarity Commitment® document provides a simple, one-page summary of key terms of your home loan. It’s written in plain language, so you’ll know what you’re getting before you sign on the dotted line.Footnote 1
Be sure to ask lenders for a direct Glossary Term: interest rate quote and the corresponding Glossary Term: annual percentage rate (or “APR”) for the loan you’ve selected rather than rely on advertised rates. The APR can give you a more accurate comparison between lenders, because lender fees are included in the calculation. Also ask if Glossary Term: points are factored into the rate and how the rate may be affected by things like Glossary Term: credit score and down payment. Keep in mind that in order to provide a quote for your unique situation, many times lenders will need to request your approval to look at your Glossary Term: credit report.
For more about rate comparisons, see APR vs. interest rate.
Homebuyer tip:When asking for quotes, be sure to let lenders know the type of home you want to buy. Rates and Glossary Term: terms for Glossary Term: single-family homes are often different from rates for Glossary Term: condos or Glossary Term: second homes.
You may also want to find out if the lender will be servicing your loan. The lender you close your loan with may not be the company that services your mortgage over the long term. If you need to make changes or have questions about your loan after it’s closed, personalized customer service can be important.
Affordable products and housing programs
Some lenders offer programs for low- to moderate-income borrowers. These can provide Glossary Term: down payment
or Glossary Term: closing cost
assistance for a new mortgage or refinance, or support non-traditional Glossary Term: credit
requirements (using utility bills to show payment history, for example). Also, some community-based organizations may be able to help you. For more information about approved down payment assistance programs, check with the U.S. Department of Housing and Urban Development, visit http://www.hud.gov/buying/localbuying.cfm
, or ask your lender. Finding the lender that’s right for you might require asking questions and being willing to shop around. The right mortgage or refinance lender should help you feel more confident, during the application process, during the closing process, and for as long as you own your home.