You’ve probably heard you should contact a mortgage lender to see what loan amount you can qualify before you begin house hunting because being pre-approved can help your offer be accepted, no matter what type of market we’re in.
But it’s important to note that like real estate agents, not all lenders are the same and it’s worth taking a little bit of time to understand why and how to choose a good mortgage lender.
Why Mortgage Lenders Matter for Real Estate Transactions
Great mortgage lenders know a variety of loan options inside-and-out. Finding the best loan product for your situation can save you thousands of dollars over the life of your loan.
Good lenders can also help make buying real estate quicker and less stressful. Who doesn’t want that?
We want you to have the best real estate experience possible, so we wrote this article to help you understand which things are important to consider when choosing a mortgage lender.
What Qualities Make a Good Lender?
The best lenders tend to share these ten important qualities:
- Interested – in your questions, goals, and situation
- Knowledgeable – about a variety of loan products to find the best deal for your unique circumstances
- Good Teachers – answer your questions about loans and terms in a way you can understand, without being pushy
- Responsive – to your emails, calls, and texts
- Trustworthy – honest and have your best interest in mind
- Good Reputation – among real estate agents and others in the community
- Available – Does your lender strictly work 9-5 Monday through Friday, or can you reach them on evenings or weekends if you need something?
- Creative – helps you solve obstacles by offering creative solutions
- Always Learning – about the industry and new financing options
- Detail-Oriented – can stay on top of financial deadlines to ensure closing happens on time
Related Post: How to Tell if Your Realtor is Good
What are Good Questions to Ask a Lender?
Here are some good questions to ask a mortgage lender:
- What are the best interest rates and programs can you offer me?
- How long does it take to get pre-approval?
- How quickly can you close once I’m under under contract?
- What are origination, lender, and other fees would I need to pay?
- How much of a down payment is needed?
- How long can you lock in a rate?
- Are there loans for buying a duplex/condo/townhouse as my primary residence?
- Are there special loan programs for first-time home buyers, teachers, veterans, etc. and how do those compare to other loans?
- How much of the process is done online vs in person?
- What type of home can I buy (or not buy) with each loan option?
Or if you’re considering building a house in Wisconsin, ask about the new construction loan process!
Pre-Approval vs. Pre-Qualification
Pre-approval is the process where the lender verifies your information and approves you for a mortgage. After completing a pre-approval, you receive a formal document that confirms the mortgage size and interest rate your lender will give you.
While pre-qualification uses estimates, a pre-approval uses verified information.
Mortgage lenders will review your financial documents to determine what you and any co-borrowers are eligible for, which may include:
- Credit scores & history
- Housing payment history
- Debt obligations, such as credit cards, car loans, & student loans
- Bank statements for savings, checking, and investment accounts
- Tax returns, W-2s, and 1099s for two years
- Pay stubs
- Social Security numbers
You have the option to lock in that rate if you’re satisfied with the product.
Compare Loan Estimates
Loan Estimates spell out important details about your requested loan, including the estimated interest rate, monthly payment, fees, and total closing costs.
A loan estimate is a document lenders must give you after you’ve applied for a loan and have provided certain information, including the address of the property you want to buy.
After reading each line and asking the lender questions about anything you don’t understand. At this point, the lender has not yet approved or denied your loan application. Carefully compare costs and terms from the lenders you’re considering to choose the best mortgage option for you.
How far in advance should you get pre-approved for a mortgage?
Ideally, you will get pre-approved for a mortgage shortly before you start looking at houses, so you know for which houses you are likely to get lending and to increase the likelihood your offer is accepted.
Typically, your pre-approval is good for 90 days, but it’s possible it’s only valid for 30 days.
This is another reason it’s important to have an accessible and helpful lender because if your house search lasts more than 30-90 days, you may need to get an updated pre-approval or extension.
5 Recommended Jefferson County & Dane County Mortgage Lenders
We’ve helped clients close thousands of real estate transactions in Wisconsin that involve lenders. We’ve had great experiences with lenders–and terrible.
We want you to have a smooth process buying your next home, so if you’re getting a mortgage, we highly recommend contacting any of these five Southern Wisconsin lenders (in no particular order):
Jake Schultz – Bank of Lake Mills
Office: (920) 945-0770
Cell: (920) 728-1870
400 Bernard St. Watertown, WI 53094
Diane Rue – Johnson Financial Group
Office: (920) 568-5641
200 Sherman Avenue West, Fort Atkinson, WI 53538
Aaron Meyer – Great Midwest Bank
Office: (608) 827-5152
Cell: (608) 444-5178
6702 Odana Rd. Madison, WI 53719
Tori Wolley – Summit Credit Union
Office: (608) 243-5000 ext. 6201
1610 S. Church St. Watertown, WI 53094
Tom Dehnert – Badger Bank
Office: (920) 563-2478
220 Grant Street, Fort Atkinson, WI 53538
Ben Mlsna – Bank of Deerfield
Phone: (608) 764-1022
15 S. Main St. Deerfield, WI 53531
Kyler Kabat – Farmers Merchants State Bank
Commercial Mortgage Lending
Phone: (608) 655-1632
210 W. Madison St. Waterloo, WI 53594
Local Lenders vs Big Name Lenders
You’ll notice all of our recommended lenders are local, not giant financial companies.
In small towns like we have in Jefferson County, you may see your lender at the grocery store, school activities, subdivision, or sporting events.
This helps foster a partner-relationship where lenders and borrowers interact with one another as humans, not just a no-name number or lead on the computer.
When you choose a local lender, you’re a real person with real goals.
All of these Jefferson County lenders have brick-and-mortar offices, so you can stop in communicate face-to-face if something isn’t quite right or you have questions and prefer face-to-face communication. You don’t have that option with giant lending companies.
Local lenders typically use local appraisers who have a better understanding of the local market, so working with a local lender can be a much smoother process for you and often lead to a quicker closing.
-Written by Val Breit
Questions About Lenders?
Reach out to us and we’d be happy to help you find a good lender for your situation.
Save These Tips & Share With Friends
If you want to save these tips for finding a good mortgage lender for later, Bookmark it to your Favorites or save it to Pinterest!
Also, if you know anyone looking to buy a new home in South-Central Wisconsin, share this list of recommended Jefferson County mortgage lenders with them because everyone deserves to have an amazing real estate experience!