Mortgage Lender? Need One?

Which do you find first, a mortgage lender or a home? It is usually best to find a lender first.

Sellers tend to be favorably impressed when a potential buyer has a "lender letter" in hand. The "power" of lender letters varies greatly.  They come in two general categories - pre-qualification letters and pre-approval letters.

Pre-Qualification Letter

The weakest pre-qualification letter basically says "if everything the borrower has told me is correct, he is eligible to borrow $XXXXXXX."  A stronger version says "I have looked at an ´in file´ credit report, and based on that and what the borrower has told me, he/she is eligible to borrow $XXXXXX." In both cases, however, the seller can determine later that the would-be borrower does not qualify.

Pre-Approval Letter

The pre-approval letter says "I have checked the credit of this buyer and my firm is committed to issue a loan of $XXXXXX so long as the house being purchased appraises for $YYYYYY." This language can help persuade a seller to accept your bid. Even if yours isn't the highest bid, the seller will know there shouldn't be any problem with the funding process. Avoiding funding problems will be very attractive to the seller.

Finding A Mortgage Lender or Mortgage Broker

You can find a lender locally or nationally. Personally, I suggest you look to friends for recommendations. They should be willing to tell you the mortgage lender or broker they used and if they had a good experience.  

If you are unable to get any positive recommendations, there is always the power of the Internet. You can simply search for "mortgage lender" or "mortgage broker."

Regardless of how you pick a lender, always remember you are the customer. Figure out what you want from your lender and politely but persistantly demand answers. There are plenty of lenders who want your business, so don't hesitate to walk away from one.

Generally, we have a policy of not recommending lenders. Still, there are a few who are so good that we simply can't resist. 
 

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