How to Choose the Right Money Lender
When you’re in the market for a home loan, it’s important to choose the right lender. Your decision can impact how much you’ll pay over the course of the loan, the type of loans you qualify for, and even your subjective experience as you apply and make payments.
Before you start looking for a lender, work to understand your personal situation. Do you know what type of loan you need? What is your current credit score? How much money are you currently making and how much debt do you currently hold? Is it more important to have a low-interest rate or a low monthly payment? How much debt are you willing to take on? How soon do you need to act?
Comparison shop. You can conduct your own online searches, gather recommendations from friends and family members, or even use an online comparison service to find new information. Then be sure to study the following variables, at a minimum:
Loan type: There are many different types of loans available. Research your options. Not all lenders offer all types of loans. Some specialize in offering a certain type of loan, such as a home mortgage, while others have a variety of loan products to offer.
Interest rate and type. Most loans accumulate interest over time, compounding on a regular basis with an annual interest rate. You’ll want to pay close attention to these variables since they’ll influence your monthly loan payments and how much you’re going to pay over the course of the loan. For example, with a 30-year home loan, even tiny fractional changes in your interest rate can make a difference of thousands of dollars over the lifespan of the loan. Fixed interest rates are generally favorable over variable rates.
Term length. How much time will you spend paying this loan back? You might be able to find a lender with an attractive interest rate and an affordable monthly payment, but if it takes you 30 years or longer to pay the loan back, is it worth it?
Closing costs and fees. Are there closing costs or other fees associated with this loan? What will you have to pay in addition to interest? Are there additional fees or penalties for things like early payoff or missed payments?
Once you’ve narrowed your list of options, you can work to finalize your decision.
* Look up reviews and testimonials from customers who have used this lender in the past. Are people generally satisfied with their experience?
* If you reach out to the lender with questions, do you get an immediate (or near immediate) response? Does it seem like they offer good customer service?
* Negotiation. In some cases, you may be in a position to negotiate and push for a lower interest rate or work to waive some of the fees associated with the loan.
If you follow this procedure, you should be in a favorable position to find the right lender for your needs. With a better lender and a better loan, you’ll end up paying less over the term of the loan – and have a better personal experience in the process.
(Worldpropertyjournal)
