How to Find the Right Lender

Finding a lender is an important step in the homebuying process. It’s advantageous to find a lender at the beginning of the process so you can know your financing options and limitations.

There are generally three types of lenders, who each offer different products and services to help you buy a home.

 

• Mortgage lender: an individual at a bank, mortgage company or credit union that issues a loan.
• Mortgage broker: a middle person between borrowers and banks who shops around to find the borrower a loan.
• Correspondent lender: someone that lends money directly like a traditional lender or who can shop your mortgage around to other lenders, like a broker.

Do Some Research

To start your search, ask people you know about their homebuying experience and if they recommend the lender they used. You can also ask your real estate agent to recommend one. Real estate agencies often have a joint venture with a local lender to refer clients, however it’s a best practice for your real estate agent to give you at least three options.

You can also use our convenient “Find a Lender” search tool to access a list of Virginia Housing-approved lenders in your area who can assist you with navigating our programs and resources. Our Mobile Mortgage Offices also bring home loans and grants to homebuyers in rural areas of Virginia where there may be fewer Virginia Housing-approved lenders.

Ask Questions

Once you’ve found several lenders to pick from, make sure you understand exactly what each lender can offer.

 

Use this list of questions to help find the right lender for you:

• What types of loans do you offer? Conventional, FHA, VA, USDA/RHS, 203k Rehab? Other types?
• What is the current interest rate for the loans you offer?
• How much are your expected application, lender and origination fees?
• Does the loan require a Mortgage Insurance Premium or Private Mortgage Insurance?
• Can you lock in the rate? If so, when is the rate locked in — at application or at approval?

When you are deciding on a lender, keep in mind the best one is the lender that offers the most competitive rate, the lowest fees, the fastest turnaround on paperwork and approval and who is the most responsive to your unique needs.

Learn more about choosing a lender by
signing up for our free homebuyer education class!