Shop for a loan
Finding a lender
There are plenty of places to find one: your own bank or credit union, a mortgage broker, an online lender, or a referral from somebody you trust. We are glad to suggest lenders we have closed deals with, people who have stayed competitive and have come through on harder files, like an unusual property or credit that needed some work. You are never obliged to use anyone we suggest.
In our experience a lender who knows Whatcom County, and whom the listing agent can reach on the phone, makes your offer look stronger to a seller.
Choosing between them
Talk to several and compare them on these points:
- Do they explain things clearly, and do they call you back in a reasonable time?
- How do their interest rates, costs and fees compare? Ask each for a written estimate on the same day so you are comparing like with like.
- Do they have loan programs that fit your credit and the kind of property you want?
- Are their underwriting and approval people familiar with property like yours? This matters most for land, condos, rural houses on a well and septic, and anything else out of the ordinary.
Kinds of loan
There are more loan types than we could list here, and your lender is the right person to match one to you. These are the three we run into most.
Fixed rate. The interest rate, and so the principal and interest payment, stays the same for the life of the loan, commonly fifteen or thirty years. People who expect to keep a property a long time tend to like the predictability.
Adjustable rate (ARM). The rate usually starts below a fixed loan and then moves up or down with the market. That can suit somebody who expects to sell or refinance within a few years. Before you choose one, make sure you understand which index the rate follows, how often it adjusts, the caps on how far it can move, and what your payment would be in the worst case.
Hybrid or intermediate ARM. The rate is fixed for a set number of years at the start and then adjusts periodically after that.
Which of these is right for you is a lending question, and sometimes a tax one, so put it to your lender and your CPA.
Next, get to know the numbers on a loan estimate.