Tips for choosing your next mortgage lender

Home buyers today have a variety of options when it comes to finding a mortgage lender. They can choose a traditional face-to-face relationship with a lender at their local bank, opt for a mortgage broker who will shop the best deals for them, or go it online with a range of non-bank lenders, such as Quicken Loans, Rocket Mortgage, or Lenda.

Be aware, however, that more than a quarter of first-time home buyers regret their choice. According to a mortgage satisfaction study by J.D. Power, 27 percent of first-time buyers and 21 percent of all home buyers wish they had chosen an alternate lender.

Customers reported dissatisfaction with communication, unmet promises, and feeling pressured to choose a particular lending product.

To help you complete your next home loan experience without regret, here are some factors to consider beyond finding the lowest rate:

Speed: Ask lenders about estimated closing dates and work with a responsive lender who will get you to the closing table on time. Time-to-close can be a key negotiating factor in competitive real estate markets.

Experience: If you’re looking for a VA or other government loan, if you have bad credit, or if you are looking for a jumbo loan, seek out lenders that have experience in that area. You don’t want to be the one who helps your lender “learn on the job” for a specialized loan.

Portfolio lenders: These lenders keep mortgages in-house rather than reselling them on the secondary market. That means they often have more flexibility to finance non-traditional properties or to make exceptions for special factors, such as low credit scores or debt-to-income ratios.

Mortgage brokers: These professionals shop your deal to multiple lenders in order to find the best rate and structure. They can help coach you through the process, steer you away from onerous terms, or provide access to special discounted rates. You’ll pay a fee for this service, but ask if your mortgage broker is getting compensated by the lender as well. Your broker may have incentives that don’t always align with your goals.

Finally, you simply need to consider your own temperament and comfort with the real estate lending process. Are you content to work with an online entity or do you want to sit down and chat with a local lender?

If you’ve been through the process before and simply want a fast, automated option, online may be right for you. But if you would like a little extra hand-holding, or someone who will go to bat on your behalf, a personal relationship could be in your best interest.