Are you in the process of buying your first or second house? You have found a Realtor, now you’re just wondering who you should go with for a lender? Let me preface this blog post by saying that most banks or credit unions will have the most competitive interest rates. However, they do not offer as large of a selection for loan products! So, what should you do as a potential Appleton house buyer? Shop around with different lenders to compare their loan terms.
Shopping Around Mortgage Lenders
Why so many people choose to shop around their loans is because of the drastic difference it can have in the long term. Most house loans are 30-year mortgages. This means that the first time home buyer will have the same exact loan in place for the next 30 years unless they refinance their mortgage or sell their home.
Shopping around with different mortgage lenders is the smart thing to do. One lender might offer you a rate of 3.75% and the other is at 5.15%. That difference can add up to tens of thousands of dollars over the term of the loan. Along with the interest rate, you will want to take into consideration the downpayment amount, loan product, Private Mortgage Insurance, & other fees.
Are Banks or Credit Unions Better for a Home Mortgage?
In my experience with helping home buyers in the Appleton WI area, both banks & credit unions are rarely similar on terms. If I had to make the judgment call, I would say credit unions have a little bit of an advantage if they are not as large of an institution and can be more flexible on terms.
I personally bank with local banks for my mortgages on rentals & personal property. The local banks are typically more creative & can fit the needs of their client. Especially if you have a long relationship with them, you will receive more favorable terms on your loan.
How Many Pre Approval Do I Need?
I would say go by the law of averages & at least go to 3 different mortgage lenders to see what they offer. You may decide to go with a bank, credit union, & mortgage broker or some sort of combination of the 3. The nice part about shopping different lenders is your credit only needs to be pulled with 1 initial hard inquiry. It is true that when a lender pulls your credit your score will go down. However, if you get 3 different pre-approvals within 90 days of one another, it will only be 1 hard inquiry reported.
How to Get Started
If you are interested in learning more about the home buying process or want to actually start searching for your first home please reach out! Feel free to fill out the form below or call/text me on my cell phone which is 920-252-2864