When you are a first-time house buyer, looking for the best mortgage lenders can feel like a chore. The decision-making process can be stressful and time-consuming. Buying a house is a long-term commitment. Payments for a mortgage may take 15 to 20 years to complete. But like buying a car or insurance, it is important to weigh the options. It is not just about getting the best interest rates on the market.

The list of mortgage lenders willing to accept and process your loan application can be long. However, be wary of these companies as not all lenders offer the right deal for you. The best ones offer lower down payment schemes, help you look for alternative financial assistance programs, embrace government loans, and charge reasonable rates.

Here are 5 useful tips to help you get started.

Build your credit score and know your history

When you apply for a housing loan, mortgage lenders will check your financial history and credit score. A low rating and bad financial payment history greatly affect mortgage rates. If your standing is good, you will have better chances of negotiating a fair rate with potential mortgage lenders.

Review your credit score – make sure it is accurate and error-free. There are three trusted leading credit bureaus that can give you reliable reports: TransUnion, Equifax, and Experian.

Next, get your financial status in shape. Pay off debts that have high-interest and lower levels of debt as soon as possible. Doing this will make your income-to-debt ratio significantly better. Paying off recurring loans and credit cards will also free up more of your budget – freeing up more money to pay mortgage loans.

Decide what type of mortgage lenders you want and compare

Check out the lender that you want – is it a small lender or large one? For personalized customer experience, small lenders are the best option. To get the right interest rates, go for large lending companies. Do research before making a conclusion – compare and ask around. Check the companies’ online presence and read their reviews.

Ask friends or family members about their own list of mortgage lenders. Referrals from trusted people can help narrow down your options.

Look for lenders that offer government-assisted home loans

Government agencies like the Federal Housing Association, U.S. Department of Agriculture, or U.S. Department of Veteran Affairs normally have flexible income, credit and down payment requirements. This makes the application and qualification process easier.

FHA loans require as low as 3.5% down payment while loans from VA and USDA can be obtained with zero down payments. And the minimum credit score requirements for those agencies are normally lower than traditional loans.

There are limits, however, to how much you can borrow. Mortgage insurance may also need to be paid with your monthly dues.

Talk to a certified real estate agent

A dependable and reliable real estate agent will not limit suggestions to their in-house mortgage lenders. Let the lender know that you got to know them through a recommendation from your agent. Most smart loan officers give importance to and take good care of clients recommended by real estate agents. This type of connection will help reduce closing costs.

Get pre-approved from potential lenders

Getting a pre-approval means that a lender is willing to accept your application and can offer the loan you need. This also provides an idea of interest rates and mortgage payments for the amount being borrowed.

Compare pre-approval options when looking at the best mortgage lenders. Some lenders will require a phone call or a personal visit to submit the documents. Other lenders will allow submission online and provide approval within minutes. In comparing mortgage lenders, consider the methods of how they pre-approve a loan, the documentation requirements and whether their schedule suits you best.

If there are barriers like inconsistent income or low credit score, ask guidance from lenders before applying. Most of them are willing to work around these issues.

In conclusion, as you go through the list of mortgage lenders and narrow down your options, it is important to look for a lender with the three C’s. The right lender should be capable, caring, and competent. With the right tools and proper knowledge, the right decision will be achieved in the end.

It is normal to take your time and be careful when choosing the right lender. Buying a house is a huge investment. With Calcite Credit Union, you can be assured that the mortgage process will be as smooth and hassle-free as possible.