How to Choose a Mortgage Company in Pennsylvania

Buying a house is overwhelming, especially if you’re a first-time homebuyer. It’s a balancing act between finances, rate quotes, credit reports, down payments, and many other factors.

One of the ways homebuyers can make this process easier is by choosing the right mortgage company. Most people think it’s about finding the lowest rate—which, although important, is not the end-all. You should fully understand the lender, the services you receive, and any potential hidden fees. 

In this article, we hope to ease some of the troubles of the home-buying process by helping you identify the best traits of mortgage companies in Pennsylvania. 

The Different Types of Mortgage Lenders

When researching mortgage lenders, it’s important to look for a lender that provides a good mix of low interest rates, great customer service, and fast loan processing. The last thing you want is to find your perfect home and lose it because you’re unable to secure the loan in time. 

Once you have found a lender you trust, you’ll want to find a loan officer within that organization who will take the time to understand your situation. Finding the right loan is like matchmaking—you don’t want to end up with the wrong one. A good loan officer will assist you in choosing the right loan and walk you through the application and closing processes step-by-step. 

Finally, be sure your mortgage company provides mortgage rates and lender credit score minimums specifically for Pennsylvania homebuyers. A local loan can provide more financial advantage to the state’s market than, say, a Federal Housing Administration (FHA) loan. 

So what are the different types of mortgage lenders? Well, there are many, but here are some of the more common lenders that you are likely to come across during your research process:

• Conventional banks: This option works well if you want all of your financial accounts in one place. However, there are a few downsides. You may experience slower loan closing times, and the lender might not offer government-backed loans, including FHA, Veterans Affairs (VA), or United States Department of Agriculture (USDA) loans.

• Credit unions: Although costs and interest rates might be lower with credit unions, they often only offer loans to members. Like banks, credit unions take longer to close loans and may not offer government-backed loans. 

• Mortgage broker: Brokers do not lend money directly, but rather bridge the gap between loan programs and homebuyers. Although this gives you more options, brokers do not have control over the speed of a loan approval, and they charge additional fees that do not come with other lenders. 

• Independent mortgage banks: Independent mortgage banks (IMB) exist for the sole purpose of providing their customers with real estate loans. Because of this specialty, IMBs can take care of the entire process in house, shortening the time frame of obtaining a mortgage. In-house processes also allow the loan officer to work with the homebuyer from start to finish. 

How to Decide on a Mortgage Lender 

Although there are many moving parts to securing a mortgage loan, there are several deciding factors that you can control:

Understand how long the process will take.

The home-buying process is often a quick one, with an average length of 50 days. A major advantage of working with an IMB is that the process, from start to finish, takes place within a single organization. Loan officers can provide more accurate time estimates than mortgage lenders that do not provide loan programs in house.

Understand how you will be in contact. 

One of the first questions you might ask is how your main contact plans to stay in touch. You will also want to understand their depth of knowledge, especially about programs specifically tailored to Pennsylvania homebuyers, loans beyond state assistance programs, and first-time homebuyer discounts and tax credits that can significantly offset costs.

Understand whether the process will take place online or in person.

Although online mortgage lenders are available, it’s advised that you work with an expert in mortgage loans that is available to answer the questions that will inevitably arise. With an IMB, the entire process can take place in person, which allows you to ask questions and get immediate answers throughout this fairly difficult process. 

Understand how the lender settled on the loan for you.

There are many mortgage loans available, and if you are in good financial standing, your lender will likely have a number of options to choose from. Be sure you understand how your lender landed on your loan.

Understand your mortgage insurance.

Mortgage insurance usually only applies if the buyer puts down less than 20 percent or acquires an FHA or USDA loan. Although mortgage insurance is ultimately for the lender, it can help the homebuyer acquire certain loans because it signals less risk for the lender. 

The Customer-Centric Option

At radius financial group, we understand that the journey of first-time home buying can be difficult and confusing. We differ from other mortgage lenders in that our sole activity is providing homebuyers with mortgage loans. We have no memberships, no additional financial services, and no hidden fees. Instead, we focus on providing ongoing customer service, researching the right loan for you, and remaining transparent throughout the process.

For more information, see our guide for first-time homebuyers in Pennsylvania, which offers advice to those preparing for their first home purchase and provides resources specific to residents of Philadelphia, including a list of courses to take that can assist in the home-buying journey.