Your home is one of the biggest investments you are likely to make in your lifetime and the mortgage loan you take out to finance it sets you up in a long-term relationship with the lending agency. Because of the gravity and potential risk encapsulated in a loan situation, it’s important to find a mortgage lender who offers the best services and rates to fit your needs.

You don’t want to enter into a contract with just any lending agency, but how do you find one that you can be confident working with over the next 10, 20 or 30 years? The vetting process may seem daunting, but it is also worthwhile.

Finding the Mortgage Lender for You

To help you get started finding a quality lending agency that suits your financial situation and will fulfill your expectations as your pursue purchasing a new home, here are a few tips:

1. Research Rates and Shop Around

When you’re talking about a loan for a couple hundred thousand dollars, the difference between a 0.5% and 1% interest rate is significant and could cost you thousands of dollars in interest payments over the life of the loan.

Meet with representatives from several lending agencies to see if you can get approved for a certain amount and at what rate.

Don’t accept the first offer but take your time to find a mortgage lender that can save you money with a low interest rate.

2. Scrutinize Reputation and Qualifications

There are numerous entities from which you can get a mortgage, including local banks, national banks, online mortgage lenders, credit unions, and other financial institutions. Select an agency that is reputable, credible, and trustworthy. To vet agencies, you can use the following safety checks:

• Checking the Better Business Bureau
• Visiting the Nationwide Multistate Licensing System Registry
• Learning if the agency is part of the National Association of Mortgage Brokers

These organizations give you insight into the professionalism, customer service, licensure, and standing of any institution you are considering as a mortgage lender.

3. If it Looks too Good to be True, it Probably is

Especially if you are shopping around online, lenders will advertise intentionally enticing low interest rates that are designed to generate leads. They use the term “as low as” to allow online lenders to offer you a different rate once they’ve gained your interest and learned your financial background and credit score. Read the fine print carefully and be wary of offers that seem too good to be true.

4. Consider using a mortgage broker

Mortgage brokers are like the real estate agents of the lending industry. They will talk with you about your financial situation and what you are looking for in a mortgage lender and then help you narrow down the right entities to consider.

Their deep knowledge of the industry and professional support can save you time and energy if you don’t feel confident finding a credible lender to suit your needs. You will end up paying a broker charge, though, that is generally a percentage – about 0.5% to 2.75% — of the amount you are borrowing.

From Mortgage Lenders to Realtor

Mortgage lenders play a critical role in helping families and individuals acquire a new home, since most people can’t pay out of pocket for an investment that large.

However, without doing the right research, you could end up financially disadvantaged if you go through the wrong type of lender for your situation.

Shop around, prioritize low interest rates, and use referrals from friends, families, and mortgage brokers to help you select the right mortgage lender for you before meeting with your realtor.