Selecting a Mortgage Company

The first thing to do when selecting a mortgage company is to determine whether to deal with a mortgage broker, loan originator, or a portfolio lender. Each has its relative advantages. A person with the best credit and an existing relationship with a financial institution may do best to stick with his or her own bank’s portfolio lending arm; while those with some credit flaws may wish to have more options available. Regardless of the option, it is advisable to first check with your local Better Business Bureau, and in the case of mortgage brokers, with your state’s licensing division. If the mortgage company is a publicly traded firm, then you have the ability to look at its financial reports, which are often available through online services or directly from the company’s web site.

Selecting a mortgage company goes beyond simply examining the different rates offered; it involves choosing a reputable company, and choosing one that has a mortgage product that will suit your own situation. If you have some credit problems, the mortgage company offering the most attractive interest rates will not be for you.

After determining which companies has the mortgage products you are likely to need and checking on those companies’ backgrounds, it may be worthwhile to spend a few minutes talking with an officer of each one, to determine how their process works, and how willing they are able to work with you given your own specific situation. Then, after you have done all that, it is time to compare rates.

Interest rates, however, are not the only expenses involved, and one must also consider what additional fees, points, or commissions must be paid, and whether private mortgage insurance will be required as a condition of the loan.

Lastly, it is important to note that mortgage companies are increasingly making their decisions at least in part based on a computerized analysis, so if your credit situation is marginal or even less than perfect, you’ll want to choose a mortgage company that is more flexible in its application of the standards and rules of underwriting.