Top 4 Tips to Choose the Right Mortgage Lender

Unless you plan to purchase your home in cash, choosing the right home is just half the battle. You will have to find the best type of mortgage from a reliable mortgage lender. You don’t want any regrets, of course.

It can be daunting, especially if you are a first-time homebuyer in Hawaii. Besides, buying a home is the largest and most significant purchase you are likely to make. With hordes of lenders ready to accept your loan application, choosing the right one can be overwhelming.

Anyways, this article provides suggestions that will guide you to select the best bank for home loans in Hawaii. Below are the top 4 tips for choosing the right mortgage lender:

1. Interest Rate Vs. APR: know the difference

Here is where the blindfold and rushing could lead to regrets, and possible complaints in years to come. Firstly, they both reflect your cost for the loan. Secondly, although they both indicate how much interest on the principal you’ll pay, they are not the same.

Here is the difference:

The interest rate is the percentage of the money you will pay against the principal. The interest rate is usually an average of the prevailing interest rate in the country. Your monthly scheduled payment on the loan is based on the interest rate.

Annual Percentage Rate (APR), on the other hand, includes the interest rate plus additional costs and fees you’ll pay to access the mortgage. Costs such as appraisal, credit card reporting, and inspection fees may not be included in the APR, but you will still cover them.

Therefore, when taking a mortgage, look at the APR and not the interest rate only. Besides, you could have a different mortgage with the same interest rate, but one may be expensive in the end than the other due to the additional charges.

2. Know your credit card score

A loan is attached with interest, and getting a loan, in the first place, is attached to your credit score. You should know that credit score is the key that unlocks financial benefits. Your credit score determines which loan you qualify for and whether you are eligible for discounted rates.

Different lenders have different credit score requirements. If you have a lender in mind, be sure to know with your credit score, what type of mortgage do you qualify to take. One lender may offer you better rates than others based on your score.

Therefore, you should keep your credit score high and within a favorable range. That way, any lender you reach out for a loan will be more than happy to renegotiates interest rates. If you have a poor credit card score, don’t rush to take a mortgage. Take time and find out ways to raise your credit score first.

3. Ask for referrals

When intending to do something new, especially being a first-time homebuyer, as for referrals. Look at your situations; you could qualify for a lot more than you think, but because you don’t ask around, you end up missing these opportunities.

Ask for referrals from friends and better still yet ask for one from government officers. Do you know that the state offers first-time home-buyer-assistance programs and grants? Well, if you meet a certain threshold, you could be eligible for a loan that comes with very low to zero interest.

The best place to begin is the department of housing and urban development. If you don’t fancy, government programs ask a friend for best lenders around with discounts, fewer costs, and low-interest rates.

4. Research the lender’s reputation

Does the lender you are reaching out to have personalized customer service? A tip if you want personalized service is to reach out to a small lender. However, that doesn’t’ necessarily mean they’ll have a better interest rate for you.

Also, don’t just rely on what you see on the lender’s website or what the lender tells you. If you know a customer servicing his/ her mortgage with a lender, ask about their honest opinion. Here are so many lenders, and that’s daunting. Nevertheless, if you know what you are looking for, you can narrow down to a few and have a thorough background check before settling for one.

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