When you’re making such a significant investment like purchasing a home you want to make sure you are working with a WA State mortgage lender you can trust. These days there are a lot of options from online lenders, brokers, banks, and more. Sifting through your choices can be intimidating.
There are a few steps that you can take to decide what WA State mortgage lender is the right one for you. You’ll want to take a look at your finances and make improvements if need be, shop around to compare lenders’ offerings, and decide if you prefer an online lender or an in-person lender to find the best home financing for you.
15 Tips to Help You Choose the Best Home Loan Experts
Finding the right guidance for your home mortgage in WA State means getting the right expert on your side.Here are some things you can do to help you find the right match when it comes to home loan expertise that dovetails with your needs.
Identify your main goal.
Identify what you will be using the home you buy for short and long term. New residence? Vacation or second home? Rental property?
Decide what type of mortgage you need
Underwriting requirements vary by type of loan, so identify what your use will be and what types of programs you may qualify for.
Know your credit score
A crucial part of getting prepared for applying for home financing is getting to know your financial picture and improving it. Imagine your home loan application as a snapshot of your financial picture.
The snapshot will determine how much you are able to borrow and what interest rate you will pay over the life of the loan, so it’s important that it’s as positive as possible. A better financial picture may open you up to more loan programs and more lenders may want to work with you so you’ll have more options to choose from.
Start with your credit score. Your credit score plays a key role in determining the interest rate you receive on your mortgage. A lender sees you as less of a risk in paying back the loan if you have a higher credit score and will most likely be able to offer you a lower interest rate. If you qualify for a lower interest rate you could save thousands of dollars over the life of your home loan.
Improve your credit score
There are three credit bureaus that you can use to find your FICO credit score; those are Experian, TransUnion, and Equifax. Look over your credit report for accuracy and take action to make any needed corrections or improvements.
Improving your credit score is something that takes time so make sure you factor that into your timeline before applying for home financing if you need to. There are many websites out there that you can use to receive weekly updates on your credit score such as Credit Karma or Credit Sesame.
Access your credit score and report from each agency without charge one each per year at www.freecreditreport.com.
Search for reviews
Looking for reviews online can give you an idea about who the best WA State mortgage lenders in your area are.
Only work with lenders who are open and honest about rates, fees, and other costs associated with a home loan, and who are willing to put their promises in writing.
Familiarize yourself with lending rates
Get to know mortgage rates in your area not just for the best case scenario, but for your financial situation and credit score. Compare current mortgage interest rates among the lenders you are interested in.
Most lenders will be able to give you a rate quote before you apply for financing. When comparing lenders it’s important to compare costs at the same interest rate or the rates available with similar costs to get a solid apple to apple comparison. It’s important to know that the lowest rate may not be the best option if the costs are substantial.
Recouping these costs can often take years. Variances in the terms available between different lenders can add up to thousands of dollars upfront and tens of thousands over the life of the loan. Talking to just one lender your real estate agent or a friend referred you to could end up being an extremely costly mistake.
Seek a referral
At Sammamish, we have a good reputation and a lot of customer loyalty, which is why we get most of our business from repeat homebuyers and their friends and family members.
Use your common sense
Only work with a WA State mortgage lender you have vetted as far as their licensing and complaints against them. You can do this through https://dfi.wa.gov/consumers/verify-license.
Gather your paperwork
Gather your tax returns, bank and investment statements, and pay stubs and be prepared to submit them for verification. Your lender should have a secure online portal.
Rein in your spending habits
Track your spending, and document it so you can account for every penny in your budget. This can help you and your lender determine what you can really afford in the way of a monthly mortgage payment.
Determine a dollar range for what you are willing to spend on your monthly mortgage payment. Just because you are approved to borrow so much money, it doesn’t mean you have to borrow all of it.
A lender will look closely at your debt-to-income ratio. To calculate your debt-to-income ratio add up all of your monthly debts and divide that sum by your monthly income. A standard debt-to-income ratio is 43%. When calculating your debt-to-income ratio a lender doesn’t look at monthly expenses such as groceries, childcare, or your cell phone bill so this is why it’s good to determine what you’re comfortable spending each month.
Knowing your whole financial picture and making it the best it could be will open you up to more mortgage lenders and more mortgage products which will help you find the best mortgage fit possible.
Look at a lot of different programs
Whether you plan on getting a 15- or 30-year mortgage, it’s good to shop around and compare your options. Different lenders may offer different loan programs and products so researching or having an idea of what different home loan options are out there and their requirements is beneficial. The five most commonly used home loans are FHA, Conventional, Jumbo, VA, and USDA.
Ask about the fees
You’ll want to compare rates and fees between different lenders that are involved in the home buying process. Upfront costs could include appraisal and inspection fees. You could also expect to pay closing costs which include costs like title fees, loan origination fees, credit report fees, and document preparation fees.
Most fees are covered by money you put in escrow, or settled at closing. Your lender should give you a loan estimate that clearly shows all fees at the start of the mortgage process, and a closing disclosure at the end that should match it closely.
Some lenders add these costs to your principal so paying back those fees are spread out over the life of the loan, which is why it’s important not to just look at your cash due at closing when selecting a lender.
When shopping for lenders be sure to ask what fees you will be charged, how much they will be, and if you will pay them outright or over the life of the loan so you can be prepared and choose a lender that you are most comfortable with.
Check for additional costs
Be aware of additional costs on top of your mortgage payment. The most common are HOA (homeowners association) fees, which you’ll typically have to pay directly, and PMI which may be paid at the same time as your mortgage payment.
Push for expertise and customer service
After you have chosen a WA State mortgage lender to work with, be sure that you are comfortable with your assigned Loan Officer (LO). They should be knowledgeable about the Seattle, Bellevue, and greater Washington area as well as smaller cities throughout the state. Your LO should also know the ins and outs of home financing and be able to answer all of your questions throughout the process.
There are three questions a loan officer will ask about your goals and finances, beyond what is included on your mortgage application so they get to know your goals and whole financial picture so they can make sure you are getting the best loan program for your situation.
If you find an LO that is pushy, trying to make you get the maximum loan you qualify for even if you don’t need it, or giving you a bad feeling by being unclear with answers to your questions, it’s often a good idea to look elsewhere.
Online Mortgage Lenders in WA State
These days, homebuyers are inundated with different ways to get home financing whether the lender is online or in-person so there is a lot to take into consideration when deciding which lender is the best for you. An online lender will most likely be able to offer you a lower rate than an in-person lender.
An online lender will assess your financial situation based on your loan application and offer the convenience of being able to apply for home financing and electronically sign your documents from anywhere at any time. When working with an online lender it is vital that you have an easy point of contact and you are not dialing into a call center that can land you with a different person every time you call.
If you are not comfortable communicating via phone, email, or online, working with an in-person lender or a lender that offers the flexibility of meeting face to face or doing everything online may be your best option. Working with an in-person LO may be unrealistic given your schedule, traffic, kids, or just time to dedicate to obtaining a mortgage in general.
This is where multiple communication options and new technology making it easier to get the required documents signed and delivered can make the process much easier.
There you have it! When looking for the best WA State mortgage lender for you in Seattle, Bellevue, or Kirkland there is a lot to take into consideration. Make sure you are financially prepared so you are open to as many opportunities as possible, compare lenders’ rates and offers, and ultimately work with a lender that you trust and are comfortable with.
Loan Limit Basics
If you take out a home loan that is higher than a certain limit, your mortgage will be considered a “jumbo loan.” That’s because of loan limits, which are dollar limits placed on mortgages. For conforming loans, loan limits are caps that are placed on loans that Freddie Mac and Fannie Mae will purchase or guarantee.
For FHA loans, loan limits are dollar caps on loans that the FHA backs. VA loan limits have been eliminated. But some borrowers may still be subject to them if they currently have a couple of VA loans or have defaulted on one in the past.
Loan limits are assigned to every county in the country and usually increase at the start of every year to reflect the growth in home prices.
Check out our mortgage loan limit tool for conventional, FHA, and VA loans.
Why Sammamish Mortgage?
Sammamish Mortgage is a local mortgage loan company that has been serving clients since 1992. We support borrowers all across the Pacific Northwest, including Washington, Oregon, California, Idaho, and Colorado. We are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have any questions or are ready to apply for a home loan.