Buying a home is one of the biggest decisions you’ll ever make. A huge part involves picking the right mortgage lender to ensure you get the best terms, rates, and support during the home loan process.

It sounds daunting, and it can be without preparing ahead of time. But when you take time to learn about the process, you’ll feel more confident in navigating it. Here’s a quick breakdown to help you get better acquainted:

1. Understand Your Options

There is more than one type of mortgage lender out there. Before you commit, fully understand your options:

Banks

Traditional banks offer mortgages, which is convenient if you already have a home bank. Plus, they have other financial products you could use, like checking accounts or personal loans.

So, if you already have a good relationship with your bank, start there.

Credit Unions

Many people have both a traditional bank account and a credit union account because credit unions offer some perks that regular banks don’t. For one, they’re member-owned financial institutions, which means they have a vested interest in the same things you do. And two, they offer lower fees, competitive rates, and personalized service, which is definitely a win.

Mortgage Brokers

Brokers don’t lend money themselves, but they do work with many other lenders to find you the best deal. They come in handy when you want to shop around without doing all the legwork yourself.

Online Lenders

Sure, these lenders only operate online, making using them more convenient. They do offer lower rates sometimes, so they may be a good fit if you want a streamlined application.

2. Compare Rates and Fees

One of the biggest things to think about when picking a lender is the interest rate they offer. A lower rate can save you a lot of money over time. But it’s not just about the rate; there are some fees to keep in mind, too:

Origination Fees

These are basically charges to process your loan. Some lenders have higher origination fees, which can add up.

Closing Costs

These are a group of fees that involve finalizing the mortgage — i.e., appraisal fees, title insurance, etc. Because there are quite a few, be sure to get a clear breakdown of these costs from each lender.

Prepayment Penalties

Sometimes, a lender will charge you if you pay off the mortgage early, which can be a deal-breaker for some. To make sure this doesn’t happen to you, please check with your lender to see how they handle these situations.

3. Look at Customer Service

It’s not all about numbers. You also want a lender who makes the process as smooth as possible. This is what you should look for:

Responsiveness

How quickly do they get back to you? You don’t want to be left hanging for days waiting for a reply.

Transparency

A good lender will be upfront about everything—costs, conditions, you name it. You shouldn’t leave you guessing about what you’re signing up for.

Support

Even if this isn’t your first rodeo, you deserve a lender who will fully support you throughout the entire application process. So, read reviews, ask for recommendations, and verify their licensing to check that they have a reputation for providing good service.

4. Consider Your Loan Options

Different lenders offer different types of loans, so you must choose whatever suits your needs. Here are some of your options:

Fixed-Rate Mortgages

With fixed-rate mortgages, your monthly payments won’t change, which can be nice if you value predictability.

Adjustable-Rate Mortgages (ARMs)

These tend to offer lower initial rates, but they can change periodically. They’re good if you plan to move or refinance before the rate adjusts.

FHA, VA, or USDA Loans

These are government-backed loans, so they come with specific eligibility requirements. But if you qualify, their exclusive benefits will be well worth the application process.

5. Get Pre-Approved

Before you start house hunting, it’s a good idea to get pre-approved for a mortgage. During this process, your lender will look at your financial situation and give you a pre-approval letter letting you know how much you can borrow.

Doing this shows sellers you’re serious. It also helps you better understand your budget.