April 8, 2022

Your Guide to Finding the Best Mortgage Lender: 7 Steps You Absolutely Want to Take

One pit trap that lenders frequently fall into is going with the first low rate they see. But, there’s more to finding the best mortgage lender than just securing the lowest rate on the market.


More often than not, you aren’t snagging a “great deal.” You’re locking yourself into a mortgage contract that doesn’t meet your needs nor does it protect you.


But, how do you find a mortgage lender that’s going to be optimal for your future? It’s important to shop around and see your options. Here are the 7 steps you absolutely want to take to find the mortgage lender you’ve been waiting for.

  1. Improve Your Credit

When wondering how to find a reputable mortgage lender, you need to consider your credit score. Your credit score is one of the most important factors that mortgage lenders consider when reviewing your application.


When you have a high credit score, lenders are more inclined to offer you low rates without compromising your other needs. Minimum credit score requirements vary based on the loan you seek, but we recommend a credit score of 760 or greater to qualify for the best rates.


If you currently don’t meet that credit threshold, it is important that you first raise your score to open up more mortgage doors and opportunities. Here are some practical steps to raise your credit score quickly:


  • Obtain a free credit report from Experian, Equifax, or TransUnion
  • Review the above credit reports to understand why your credit is low
  • Have mistakes or correctable errors removed from your credit
  • Pay down each of your credit cards below 30% of the available credit
  • Catch up on past-due accounts
  • Be added as an authorized user to an older account with perfect payment history (e.g. ideally family or friends)


Of course, it’s also important to pay bills on time and keep your credit score high in the first place. For more information, this Investopedia article is a great resource.

  1. Determine Your Total Budget

While many mortgage seekers already have a house and budget in mind – are you leaving any buffer room? Mortgage lenders only base what they offer you based on gross income, outstanding loans, and revolving debt. It’s your responsibility to understand your total budget so you aren’t maxed out by the loan.


To calculate your total budget, start by creating a list of daily expenses. Consider monthly bills, utilities, gas, and even groceries among other things. It’s also important to factor in other financial goals that you may have other than financing a home.

  1. Know What’s Out There

If you want to learn how to find a reputable mortgage lender, you need to know what’s out there. Different lenders are likely to offer different loans.


And, part of shopping around is knowing what to look for. If you speak the mortgage lender language, you’ll stay in the loop and be more involved in the process. Today, the bank and the once-normal 20 percent down payment isn’t the only option you have.


Traditional loans are still available, but there are also many newer types that require little to no down payment. A bit of upfront research can help you distinguish fact from fiction and help you stay financially sound. Don’t know where to begin? Check out this NerdWallet article covering 8 of the most common mortgage loans out there.

  1. Start Searching and Comparing

Shop around and keep your standards high (but reasonable) when it comes to mortgage lenders. Look to banks, credit unions, online lenders, local businesses, and independents – then, cross-examine what each has to offer. Look at the rates, fees, and the terms. Don’t settle with a mortgage lender unless you’re convinced that there’s no better option out there.


  1. Gather Your Documents

Now you know what you’re working with and what’s out there, the next step is to gather your documents and start applying. There are several documents that you’ll need to gather before you start applying. Since you want to apply for several loans, this step will save you time.


Make sure to have these documents on hand:


  • Valid state-issued ID
  • Residential address history
  • Social security numbers of all borrowers
  • Most recent pay stubs
  • At least two years of tax returns (W-2 or 1099s)
  • Bank statements from the last 60-days
  • Down payment information
  • List of assets and financial accounts 
  • List of all revolving and fixed debt payments


  1. Get Pre-Approval With Multiple Lenders

The rates and terms that you see online are estimates at best. If you want something that’s more accurate per your finances, get pre-approved with multiple lenders. The act of applying to loans is non-binding and we encourage that you apply to multiple lenders at once. This is the only way to get accurate loan prices and terms rather than just generic estimates.


Once you know the numbers you’re actually working with – you can then pick the most suitable lender with confidence.

  1. Read the Fine Print

We’ll admit that reading fine print can be time consuming and a bit boring – but don’t fall victim to buyer’s remorse later on. Once you sign a loan, it is binding and you want to stay protected.


Because the fine print contains loan jargon that you may or may not understand, go get your questions answered. Make sure that down payments, closing costs, billing, processing fees, and other factors are discussed previously with the lender. Write all your questions down, and set up a date and time where the lender can clarify things as needed.

At LendPro Mortgage, we know how important it is to work with the right mortgage lender. We want to make sure you get the best and that’s just what we offer. Contact us today and let us get you started!