More than one in five home-buyers regret their choice of mortgage lender. Many borrow from the first lender that offers them a competitive interest rate and reasonable fees, which might be the bank where they happen to have a checking account…or the lender that their real estate agent recommends. Some lenders turn out to be especially frustrating. Among the common complaints: They fail to return calls promptly…miss deadlines…and/or demand a lot of unnecessary information and documentation. Many borrowers complain that they were pressured to choose a particular mortgage product. And new regulations have resulted in many lenders increasing the stringency of their underwriting processes in the wake of the 2007–2009 real estate market meltdown. What to do…
Contact multiple lenders to get quotes or to ask questions about the quotes you received from their websites, and after you do so, do not just compare their rates and fees—also gauge which ones were most responsive and answered questions to your satisfaction.
Get “preapproved” or “prequalified” by a lender before shopping for a house. Borrowers who do this are significantly more likely to end up satisfied with their lenders because they do not feel as much pressure to arrange financing quickly.
Consider how much hand-holding and face time you need as well. An online-only lender might be a good choice for someone who is comfortable handling financial matters on a computer, but a local bank or credit union might be the more appropriate option if you like to look someone in the eye when you discuss complex topics.
Mortgage lenders that ranked high in a recent survey include Quicken Loans, CitiMortgage and Ditech Financial. Those that ranked low in the survey include Nationstar Mortgage, SunTrust Mortgage, Caliber Home Loans, US Bank Home Mortgage, Freedom Mortgage and Flagstar Bank. The full list and details are available at JDPower.com (click “Ratings by Industry,” then “Finance,” then “US Primary Mortgage Origination Satisfaction Study”).