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How to Find the Right Mortgage Lender

Approved mortgage loan agreement application with house shaped keyring
Fabio Balbi/Shutterstock

If you’re serious about purchasing a new home, one of the first (and likely, most important) things you need to do is the find a mortgage lender—even before you even start touring homes.

Having a mortgage lender means you can get prequalified or preapproved for a home loan, which helps you nail down your budget, and gives you some power when it comes to making an offer on a property. Because you’ll likely be working with your lender for many years to come, choosing someone who fits with your needs and your personality is very important.

What Is a Mortgage Lender?

A “mortgage lender” is a person or company that provides real estate loans. Most credit unions and major banks offer mortgage loans, as do smaller companies. A mortgage lender and a broker are not the same. A broker acts as a middle man between the buyer and the lender (provider of the home loan).

For the average consumer, any certified mortgage lender can help you get the loan you need. There are some instances however when you may need to work with a lender who specializes in certain types of home loans like a VA loan or a USDA home loan.

How to Choose a Good Lender

Buying a home is exciting, and it’s easy to go with the first lender you find, but taking the time to find the right lender can save you thousands of dollars over the life of your loan.

There are a few things you can do to make finding the perfect lender a lot easier.

  • Ask the people you trust: Ask them to tell you about the lender they worked with and how the process went for them. You could also ask your attorney or any other associate who works closely with lenders.
  • Narrow the field: Narrow your search a bit by deciding whether you want to work with a small, local lender or a larger national company? You may even decide that going with a broker is a better option (though, you’ll have to put some trust in their ability to find the best lender for your needs.)
  • Hit the internet: Check each potential lender’s website and find out what type of terms they offer. Don’t skip the fine print. Look for fees, special requirements, or anything else that would work or wouldn’t work for you.
  • Look for reviews: While you’re on the internet, actively search for reviews of companies. Start by searching the name of a potential lender plus reviews. Another trick is to search the name of the lender on the Better Business Bureau website. Don’t forget to check out sites like Zillow, Angie’s List, or even Yelp for other reviews.
  • Interview the Lenders: Make a list of questions and call each lender for a quick interview. Some may tell you they can’t answer most of your questions without personal information, but you should be able to get at least a general idea for the way the lender operates and a range of their terms.

Questions to Ask Your Lender

In your journey to choosing the perfect lender to finance your home purchase, there are a few questions you really should ask before signing any agreement. Feel free to jot these down and use these during your decision-making process:

  • What type of loan programs do you offer?
  • Which type of loan would you recommend for me?
  • Please estimate and explain the fees you have on mortgage loans.
  • How much do I need for a down payment?
  • Do you sell mortgage loans to other lenders?
  • How long have you been working as a mortgage professional?
  • What type of security do you offer to protect my personal information?
  • Will my rate change over the life of my loan?
  • Can you estimate closing costs on a mortgage of XYZ?
  • Will I need private mortgage insurance for this loan?
  • How long does it take for you to close on a home loan (on average)?

Don’t be afraid to talk to different lenders. If you are serious about purchasing a home, you can get pre-qualified or pre-approved for a home loan. Be aware, that if you move forward, lenders will likely pull your credit report. If you plan on shopping around for interest rates, make sure to have several lenders pull your report within about 45 days, according to a report on The Motley Fool. Reporting agencies will likely lump them all together so it will have less of an effect on your credit score.


Purchasing a house may very well be the most expensive decision you ever make. Don’t skimp on your lender research, or you could pay for it later (literally!).

Angela Brown Angela Brown
Angela has 14 years of writing and editing experience, including as a reporter and copy editor for two newspapers. Angela has a Bachelor's in communication with minors in creative and technical writing from BYU-Idaho. She works closely with real-estate and financial industry clients. Read Full Bio »

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