Shop for a Loan

by Alex Mendel

Finding the Right Lender

Today, lenders can be found through various sources. In addition to responding to ads in newspapers, you can find and apply to lenders online and through referrals from your REALTOR. We would be happy to suggest lenders we have used successfully, who have proven themselves competitive and capable even with challenging properties or poor credit.

Choosing the Right Lender

Interview several lenders to evaluate the following:

Clear Communication: Ability to explain things clearly and return your phone calls promptly.

Competitive Rates and Fees

Assess the competitiveness of interest rates, costs, and fees.

Suitable Loan Programs

Availability of loan programs that fit your credit profile and property type.

Local Expertise

Access to a local loan approval committee that understands the kind of property you are buying.

Choosing the Right Kind of Loan

With so many types of loans available, your lender is the best person to help you select a program that suits your needs. Here’s a summary of the three most popular loan types:

Fixed Loan

A fixed-rate loan ensures your monthly payments remain the same over the life of the loan, typically between 15 and 30 years. Fixed-rate loans are ideal if you plan to hold the property for a long period, say over 7 years

ARMs (Adjustable Rate Mortgages)

ARMs may be suitable if you plan to sell or refinance your home within the next few years. The starting interest rate is typically lower than a fixed-rate loan, saving you money initially. However, it’s crucial to understand the index, the readjustment interval, the capitalization rate, and the risks of an ARM before making a final decision.

Intermediate ARMs

Also known as Hybrid Loans, these offer fixed interest rates for the first 3, 5, 7, or 10 years, after which the interest rate adjusts with the market every 6 months or year.