Choose the right financial institution for your home loan

money-gold-coins-financeBuying a home will likely be the biggest financial commitment of your life. Besides settling on the right home, you also need to choose a home loan provider. This financial institution will be your partner on the journey ahead, so it’s worth making the right choice.

Ask around

Every financial institution with a marketing department can put across a good façade. So sometimes the best way to come up with leads is to ask those around you. Find out from your friends and family who they went through and what the experience was like. Also ask estate agents. Some real estate companies work with specific home loan providers though, so you might want to then inquire as to whether the agent gets a commission for referrals to find out how objective their advice would be.

Have more than one option

Don’t settle for the first lender you meet with. Make appointments with a few relevant financial institutions in the area (at least three), and ask to be pre-qualified for a home loan. That way you can compare service and loan options, so that you can make the most informed choice you can.

Also remember that you’ll be working closely with your lender. Spending extra time at the beginning to find someone you’re comfortable with makes a big difference. Don’t let rates be your only factor.

Consider a mortgage broker

Mortgage brokers contact lenders on behalf of you. They know the banks and understand the system. This is a convenient and streamlined option because it’s their job to shop around for the best home loan out there for you. So include a mortgage broker in your list, but remember that it’s still good to do some leg work yourself to see what’s out there.

You need a loan provider that understand you

The home loan you choose is a long term relationship. You want a provider who will study your lifestyle, discuss your plans and ambitions and provide a loan that will meet not only your immediate needs, but also allow for the future. Further, they should help you with the application, explain everything you need to know, advise you how much you need for costs, and let you know your likely monthly instalment.

In other words, how do they approach your needs?

If you inquire, every financial institution will say that they look at your personal situation and needs. But in your interactions with the institution, you will get a feel for whether this is really the case, or whether you’re just another potential borrower. If you feel like you aren’t being given personalised treatment, then move on to the next one.

Buying a home is probably the biggest and most long-term investment you will ever make. So it’s worth taking the time and effort to find the right financial partner. Just remember that there’s no rush.