Which Mortgage Company is the Best?

June 10, 2011 No Comments »

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Mortgage Q&A Friday: “Which mortgage company is the best?”

I get asked this question a lot, considering most people looking for a home loan want to go with the “best company” out there.

Unfortunately, it’s not quite that simple…because any given Monday, Tuesday, or Wednesday, one mortgage company might have the edge over another.

Sure, a mortgage company may top the J.D. Power & Associates customer satisfaction list, but what does that really mean?

Wachovia topped it back in 2007 – and pretty much imploded a year later.

Maybe customers were happy with their option arms before they reset much higher, led to negative equity, and eventually foreclosure?

Shop Around!

Okay, so we know all those surveys need to be taken with a huge grain of salt, perhaps even an entire bottle.

So what do you do? You shop around – at your local banks and credit unions, gather mortgage rate quotes online, and enlist a mortgage broker or two, who can get you access to wholesale mortgage rates.

One mortgage lender may specialize in adjustable-rate mortgages, while another may only deal with fixed mortgages or loan programs for those with less than perfect credit (subprime).

(What credit score do I need to get a mortgage?)

So you need to compare them all to determine who has the lowest mortgage rate with the best associated terms for your unique situation, not the population as a whole.

(Mortgage rate vs. APR)

At the same time, you’ll want to ensure you’re working with a reputable company.

Do a few background checks, “Google” the company, check those satisfaction surveys if you must. Ask for referrals.

Like anyone else you do business with, take your time and do your homework.

You should be shopping for mortgages months before you’re planned purchase or refinance.

Is the mortgage company keeping your mortgage?

And heck, there’s a good chance your mortgage will get sold to another loan servicing company before you know it, so the company originating your mortgage may not even matter beyond the first month, at least in terms of customer service.

But an inflated interest rate and bad terms from that company can haunt you for years, or at least until you refinance.

The takeaway folks is to shop, shop, shop. Because you’re not buying a new TV…you’re taking out a mortgage, one of the largest financial decisions you’ll likely face.

So forget about who’s “best” and focus more on understanding the terms of your mortgage and how to get the best mortgage rate.

Yes, it’s a lot of work, but it’ll be worth it in the long run.

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