With all the options available today, finding the best mortgage lender for you can be a frustrating and time consuming experience. Going through the offers of multiple banks, mortgage brokers, or online lenders as a first time home buyer can prove to be a real challenge. As a prospective first time borrower, knowing who the top mortgage lenders are and why they are on top can be the main piece of information that you need to make the best decision regarding your future.
What to Look for When Considering a Mortgage Lender
- Loan options: A reputable mortgage lender will offer you several types of loans, so you can choose the one that fits you the best. You should be given the option of choosing a loan that is backed by a federal institution such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Loans that are backed by the government usually have lower down payment conditions, as well as lower interest rates.
- Interest rates: Probably the most important factor in making a decision regarding a mortgage lender is the interest rate that you will have to pay on your loan. High monthly mortgage rates will make the overall cost of the loan much higher than what you’re actually borrowing. The type of interest that will be applied to your loan is also very important. With a fixed-rate loan you will pay the same monthly interest rate over the duration of the loan. On the other hand, with an adjustable-rate loan, your interest rate will fluctuate over the duration of the loan. Even though interest rates on an adjustable-rate loan start lower, they can rise significantly later, raising your monthly payment and the overall cost of the loan.
- Loan length: A respectable mortgage lender usually gives you the option of taking out a loan for 15 to 30 years. While going with a longer term mortgage loan will reduce your monthly payments significantly, the interest that you are going to pay over the life of the loan will be much higher than with a short term loan.
- Down payment: A high down payment will lower the amount that you will need to borrow from the mortgage lender, which will also make your monthly payments and interest rates lower. But the amount that you are willing to put down as a down payment depends entirely on your financial situation, and a good mortgage lender should give you the option of choosing how much you are going to pay upfront.
- Fees: When taking out a loan from a mortgage lender you shouldn’t be charged exorbitant fees, as those are still money out of your pocket, even if the loan terms look attractive. A good lender should also be upfront about how much you are going to be charged, and not come up with any unnecessary and undisclosed fees.
Mortgage lenders can excel in certain areas, but lack in others. As a first time home buyer, you should first be aware of your financial standing, and then try to find the mortgage lenders that best fit your needs. Here’s a list of the top 10 mortgage lenders that have continuously provided good services to first time home buyers over the years.
Top 10 Mortgage Lenders
1. Wells Fargo. With more than 270,000 employees and over 70 million customers, Wells Fargo is one of the biggest financial services companies in the United States. Named America’s Best Consumer Internet Bank by Global Finance Magazine back in 2011, the company’s assets total more than $1,300 billion.
2. Bank of America. With assets of over 2,000 billion, Bank of America is the largest bank in the United States. After acquiring Merrill Lynch back in 2008, it became the biggest wealth manager in the world.
3. JPMorgan Chase. Chase has the largest deposit base in the United States, with over 100 million credit cards issued. JPMorgan Chase resulted from the unification of various large banks in the United States, including Chase Manhattan Bank, J.P. Morgan & Co., and Bank One.
4. Ally Bank. Formerly known as General Motors Acceptance Corporation, Ally Bank is a company that offers financial services online and over the phone. Its mortgage subsidiaries include Residential Capital (ResCap) and the ResMor Trust.
6. U.S. Bancorp. After taking over the First Community Bank of New Mexico, and Bank of America’s securitization trust administration business, U.S. Bancorp became one of the biggest commercial banks in the United States. U.S. Bancorp handles mortgage loans through its subsidiary, U.S. Bank.
7. PHH Mortgage Corp. Based in New Jersey, this mortgage lending company was established in 1946 and it currently has over 5,000 employees.
8. SunTrust Banks. Sun Trust Banks, Inc. offers several financial services, which include trust services, mortgage loans, insurance, and asset management. Sun Trust Bank operates in the following states: Alabama, Arkansas, Georgia, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, the District of Columbia and Florida.
9. Provident Funding Associates. The second largest privately owned mortgage company in the United States, Provident Funding Associates has served over 280,000 customers since 1992.
10. BB&T Corporation. Founded back in 1872, Branch Banking & Trust Corporation is a bank that offers commercial and retail bank services. Based in North Carolina, BB&T Corporation has more than 1,800 offices all over the United States.
Buying a home for the first time can be a pretty straight forward process once you find the perfect mortgage lender. Don’t be afraid to voice your concerns or even refuse to work with a lender if your expectations are not met. It’s your money and that is why you need to make sure that you are getting the best deal possible before taking this big step.