Mortgage Lenders & Companies:

By definition on the eRealty site, a mortgage lender is "a Bank, Credit Union, Trust Company, life insurance company or private company that lends money on the security of land, houses, and real estate". Finding the right mortgage lender can be difficult if you are looking for a particular type of loan. Mortgage companies will be competitive, but often they only compete on certain types of loans they are "pushing" at that time. You may find that Wells Fargo Bank is really competitive on 30 year fixed loans but way off in terms of 5/1 ARMS. When I recently refinanced my house I was introduced to many more types of loans (interest only, ARMS, fixed, etc) than I knew existed. Any good mortgage lender should offer multiple loan types so you can pick the one that best fits your situation. If you only plan on staying in your house a few years, then getting a 30 year fixed doesn't make sense. Look at your options and choose wisely.

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Unless the mortgage lender has the exact loan you are looking for, we suggest using a mortgage broker. A mortgage broker works with a network of mortgage lenders so they can get multiple loan offers for you from various mortgage companies. That way you can get mortgage lenders to compete for your business. Home mortgage lenders tend to specialize in certain types of loans and by seeing quotes from multiple lenders you should get the "best rate" from one of them. You may find some that want "points" payed on the mortgage loan in order to lower the mortgage rate. Paying points is fine if you plan on staying in your house for a long time. If you pay 1 or 2 points at the start of the mortgage but get a 1/2 % point less on the rate, you will make out in only about 4-6 years time in terms of that lost money up front. Depending on the loan, many mortgage lenders will require a point or more paid up front. A "mortgage point" means that you are going to pay 1% (per point) of the mortgage amount. If the mortgage is for $300,000, then a 1 point loan would require you to pay $3000. Do the math with your mortgage broker to see which offers are the best. Mortgage brokers can usually shop your loan around to dozens of mortgage lenders, so it shouldn't be hard to come up with a mortgage loan that works. Some of the top mortgage lending companies are Washington Mutual, Countrywide, Wells Fargo, Citibank, Chase Bank. We found an excellent site run by the Federal Trade Commission that deals with "looking for the best mortgage" - you can view it HERE. They go into details on paying fees and points as well as how to obtain the lowest interest rate on the home loan. It's a very educational page with definitions of all the key mortgage lending terms like escrow, conventional loans, lock-in, adjustable rate loans, APR, loan origination fees, private mortgage insurance (PMI), closing costs, and points. There are mortgage shopping worksheets you can print out and then fill out with the mortgage lenders information. The main thing the FTC tells consumers to do is "shop, compare, and negotiate" when buying a home. You have lots of rights under the Fair Lending Acts so read up on those before you get a "bad deal". Also, don't be afraid to shop for home loans even if you have bad credit. As has been publicized recently, many mortgage lenders will get people with bad credit into home loans through "creative" lending practices.

Best Mortgage Lender:

With so many home loans on the market to choose from, it's hard to say there is a "best" mortgage lender. In theory you would think they all want your business (if you have good credit) and should compete against other mortgage companies but that is not the case. There are websites like Lendingtree.com which function much like a mortgage broker and shop your loan around to about 4 mortgage lenders to get you multiple quotes to compare. One of the best online sites for finding the best mortgage in your area is going onto Bankrate.com. You can type in your city, state, loan amount, and type of loan to get all the leading lenders in your area. A nice comparison table is brought up with APR, Points, Rate, Lock time, Estimated Payments, and other Fees. Look into fixed mortgage, ARM mortgages, Interest Only mortgages, 15 year fixed, 30 year fixed, and 10 year mortgages. In many cases your initial mortgage loan is sold through the secondary market (as was mine) and bought by a larger banking institution. I originally got a loan through ABN AMRO and within about 6 months the loan was processed on to Wells Fargo Bank. I currently have a 30 year fixed with Countrywide and at the time I was looking for a home loan they offered the best rate I could find with zero points and no fees. The internet has made it easy to shop for a home loan but we still prefer working with a mortgage broker whenever possible.

Finding a Lender When you have Poor Credit:

It used to be that if you had bad credit or a shaky credit history, you could not get a home loan from the leading lenders. That has all changed, although some tighter restrictions have been placed on lending institutions and their loan practices near the end of 2006 and into 2007. Yes, with bad credit you will end up paying more points or a higher mortgage rate most likely. That's the penalty for having bad credit, but that doesn't mean you can't get a mortgage loan. On the other hand, if you order your credit report (see below) and find out what is causing your FICO score to be lower than average, perhaps you can work on reversing some of those "bad credit items" and improving your FICO score. Anything helps when it comes time to negotiate a mortgage rate, so get started early if you plan on buying a house in the next year. Working with a qualified mortgage broker you can determine just which types of loans will be available to you (based on your poor credit history). Many people are totally surprised and shocked to find out they can obtain a mortgage loan even with bad credit.

Order Credit Report:

Before you even consider looking into a home loan through a mortgage broker or mortgage lender, get copies of your credit report. You want to check for accuracy and see what the credit bureaus have to say about your credit history. Ultimately, your home loan intereste rate will be determined by your credit history and FICO score. Often, you can repair bad credit problems and still get a good mortgage rate. Contact the companies below to get a copy of your credit report.

• Equifax: (800) 685-1111
• TransUnion: (800) 916-8800
• Experian: (888) EXPERIAN (397-3742)

Do you have a quality site or product that belongs in this guide? We are always happy to evaluate or review new products and websites. Feel free to contact us at the email address below and let us know about you. If you have a demo product you'd like us to look at, please contact us before sending anything. Thank you.

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