Mortgage Calculator

How to choose the right mortgage company

Buying a home represents for most people their largest financial transaction.  Often, the first step is to secure financing.  Given the wide array of mortgage lenders and products available, selecting the right lender is an important decision.  There are many things to consider: competitive interest rates and closing costs, a good reputation and the ability to deliver on a promise.  Your lender should possess all four qualities and be an expert in every facet of mortgage lending.
 
Beginning January 1, 2009, Michigan will require each loan officer to hold an individual mortgage license.  The license requires a rigorous background check, classroom training and on-going education.  This should ensure a basic level of knowledge and professionalism.
 
Seek out referrals or recommendations from friends or family.  Ask your REALTOR® or builder for their suggestion or inquire with your existing banking institution.  The key is to choose a reputable lender (preferably local) that you can trust.  There are plenty of good lenders, as well as others to beware of.  Have your list of questions ready.
 
How long has this person been in the mortgage business?  What specific advantages will you receive by working with them and what is their process from start to finish?  Your lender should ask questions regarding your overall financial picture and specific goals.  After your first contact, he or she should have enough information to present financing options and a good faith estimate of approximate interest rates, closing costs and loan terms. 

Next, there are 3 stages to obtaining your financing approval:

Pre-qualification
After the initial contact, a lender may pull your credit and issue a pre-qualification letter based on the income and assets you have stated.  This is sufficient for your realtor® to know that you have spoken with a lender, but does not constitute the firm approval necessary to make an offer to purchase real estate.

Pre-approval
Upon completing a loan application and providing your lender with basic documentation (typically 1 pay check stub, w2 and bank statement), your loan file can be underwritten and a firm mortgage approval letter provided to your realtor®.

Final approval
Once your offer to purchase has been accepted and inspections, appraisals and title work have been completed, the final approval is issued and your closing may be scheduled.
 
The ideal lender will demonstrate:

• A grasp of the overall financial markets and their impact on your mortgage loan
• A flexible work schedule to accommodate your needs
• A commitment to work closely with your realtor®
• An unending desire to exceed all of your expectations
  

Check out our Mortgage Company Showcase (top, left) and begin the process of finding the right lender today.

Other Resources
The basics regarding credit worthiness

Validation that a lender is licensed to originate loans in Michigan: Mortgage Licensees Locator

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