The Lender Lowdown: 5 Essential Tips for Picking the Perfect Home Lender

The Lender Lowdown

5 Essential Tips for Picking the Perfect Home Lender

Buying a home is a major financial decision. For buyers electing to make a purchase using financing one of the most important steps in that process is choosing the right lender. With so many options out there, it can be overwhelming to figure out which lender will provide the best experience and loan terms for your unique situation. To help make the process smoother, here are five essential tips to keep in mind when picking the perfect home lender.

1. Understand the Impact of Preapproval on Your Credit

One of the first steps in your home-buying journey is obtaining a mortgage pre-approval. But the way lenders run your credit can vary.  Some lenders perform a "soft" credit check during preapproval, which doesn’t affect your credit score, while others may run a "hard" inquiry right away. A hard inquiry can slightly lower your credit score, so if you’re shopping around for rates and worried about any impact on your credit, it’s worth finding a lender that uses a soft pull initially. Once you're under contract, hard credit checks are typically unavoidable, but understanding this distinction early on helps you stay in control.

2. Prioritize Communication and Availability

In today’s fast-paced real estate market, having a lender who is both communicative and supportive is crucial. You’ll want a lender who acts as part of your team, working closely with both you and your agent. A good lender will not only be quick to respond to your questions but will also be available to run loan scenarios at critical moments, even on weekends. Being able to make informed decisions quickly, especially when competing with other buyers, can give you an edge. Look for a lender who is proactive, available, and willing to offer personalized support.

3. Look for Expertise in Specialized Loan Programs

Depending on your situation, there may be specialized loan programs that could save you money or offer better terms. For example, some banks offer attractive first-time homebuyer programs with lower down payments, while others may have unique loan options for professionals like doctors, teachers, or veterans. Finding a lender who is well-versed in their bank’s specific programs and knows how to match them to your needs is a game changer. Make sure your lender can provide guidance on all the options available to you, ensuring you get the loan that fits you best.

4. Compare Loan Terms Beyond Just the Interest Rate

It’s easy to get fixated on interest rates when comparing lenders, but it’s equally important to look at the broader picture of loan terms. A lender might offer a low interest rate but charge higher fees or include terms that may not be as favorable in the long run. Ask for a Loan Estimate from each lender you're considering, which breaks down all the costs associated with the loan, including closing costs, origination fees, and prepayment penalties. A thorough comparison of these details can save you thousands over the life of your loan.

5. Work With a Lender Who Aligns With Your Financial Goals

It’s essential to connect with a lender who understands your financial goals and can tailor a loan product that fits your situation. For instance, are you planning to pay off your loan early, or would you prefer lower monthly payments to free up cash flow? Do you expect your income to increase in the coming years, or are you looking for stability with a fixed rate? The right lender will ask these questions and work with you to choose a loan product that aligns with your broader financial picture, rather than offering a one-size-fits-all solution.

Choosing the right home lender should be about more than just finding the lowest rate. It’s about finding someone who understands your needs, supports you throughout the process, and helps you secure the best loan for your circumstances. By keeping these five tips in mind, you can feel confident that you’re making a well-informed decision as you move closer to owning your dream home. As a family team with more than 60 years of experience in the business, we have developed a network of trusted lenders that can provide the support and service you expect. Call our team today and we’d be happy to connect you with a lender partner that meets your needs.