Here's how to choose an appropriate mortgage lender

Getting a mortgage or a home loan is a long term financial commitment that you make towards a lender. It is, therefore, very important for you to choose the right lender, so that there are no service issues later.

The purchase of a property is one of the major financial decisions that an individual makes in his lifetime. It is a great step personally and it is also an important relationship that you establish willy-nilly with the lender who agrees to give you the home loan. Here are some steps you should follow before you zero down on the lender.

Ask your family and friends

Till date, there is nothing better than face-to-face communication and if you are deciding to take a home loan, this is your chance to ask around for honest recommendations from family and friends whose opinion you value. If they have taken home loans in the recent past, know their experiences with lenders and the dos and don’ts while shopping for home loans.

Carry out your own research

Once you have a fair idea about the lenders you want to tap, it’s time for you to do your own homework. This is where the internet will prove to be your best aid as it is indeed a gold mine of information. Not only can you check out the details of these lenders you have shortlisted on their own website, you can check into various borrowers’ forum and read on the ground reviews of people who have availed of home loans in the past. Besides there are sure to be newspaper articles and other write ups or communication that will give a fair idea about the track record of the lenders you wish to approach.

The first impression matters

Once you are ready with your research, it is time for you to start cold calling. This is a critical step that will matter to your final choice of a lender. Take note of how the representative who has received your call, behaves when you are making your first enquiries.

Most lenders have information forms that they asked a prospective customer to fill out before they arrange a call back, so the representative who calls you to cater to your queries will already have some primary information about you. Notwithstanding this fact, take note of their attitude when you ask to be educated about their products, are they ready to give you a patient hearing and seem willing to explain or educate you about their loan products? While evasive representatives who try to skirt off your questions are a big no-no, be wary of those who are verfriendly or pushy and much too eager to get you on board.

Give fancy job titles a skip

When you make a visit to the bank or a housing finance company with the intentions of opting for a mortgage, or a representative is sent to your place, don’t be too impressed if he calls himself an “expert” whose job it is to explain the details of the about the various products you can choose from. In this day and age these so called experts will come bearing a lot of fancy titles such as loan officer, consultants and various senior versions of the same designation.

Don’t get carried away if they sound like they are offering you the best deal ever, for talking glib is a part of their job. Without any hesitation, clear your doubts and ask for estimates and other indicative calculations in writing. At the end of the day they are all agents or sales representatives of the lenders who will try and do their best to get you to purchase a loan product. So if the representative is trying to avert tough questions the moment you start asking some, and you should definitely see red!

Be prepared yourself

Finally, make sure that you are adequately prepared yourself before you zero down on a lender and are ready to make a loan application The first thing you should do is ensure that your CIBIL report is in order and you have a CIBIL score of at least 750 and above. Next, your research must have revealed the documents you require to apply for a home loan. Make sure that you have all the documents in order so that your loan application can go through smoothly. Lastly, but not the least, ensure that you have at least 15-20% of the loan amount you wish to borrow as the down payment on your loan.

Making a right choice of a lender and being prepared yourself will ensure that not only your loan approval and disbursal happens smoothly but is also a guarantee of the fact that you will have no problem servicing your loan over the long term.

(Rajiv Raj is the Director and Co-Founder of www.creditvidya.com)

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