How to Shop Around for a Mortgage Lender

Mortgage rates matter, but they’re just one part of the picture. The right mortgage lender does more than quote low rates. They move fast, communicate clearly, and help make one of life’s greatest purchases less stressful. 

Whether you’re a first-time home buyer or seasoned homeowner, understanding how to choose a good mortgage lender is key. Finding a loan to buy a home is just the beginning. Taking the time upfront to compare mortgage types, rates, and offers can potentially save thousands of dollars over the life of your loan.  

Here’s what you’ll need to start comparison shopping.  

Key takeaways

• Knowing your credit score, income, debt, and budget helps identify which mortgage options you qualify for, putting you in a better position to evaluate offers.
• Not all lenders offer every loan type, so choose lenders who specialize in mortgages that fit your needs. 
• Don’t just look at rates. When shopping for a mortgage, ask detailed questions about fees, timelines, services, and support. 
• If you time it right, seeking multiple preapprovals will not hurt your credit and can help you compare lender offers. 

5 Steps to choose your mortgage lender 

Ready to start comparison shopping? The following five steps will guide you through how to choose a mortgage lender by focusing on the numbers, loan types, and the qualities that matter most. 

1. Know your own numbers first 

If you’re planning to shop for a mortgage lender, start by first looking at your finances. 

Review your income, credit score, monthly bills, and overall debt. Also consider how much you can realistically budget for a down payment plus your monthly mortgage payments. Each of these numbers is critical as lenders use them to determine loan types, interest rates, and terms you’re likely to qualify for. 

For example, a higher credit score and a lower debt-to-income (DTI) ratio — a measure of your ability to take on more debt — can open the door to better mortgage offers. So, it’s worth taking steps to understand your numbers and get mortgage-ready before you shop around.  

The better you understand your strength as an applicant, the better positioned you’ll be to evaluate lender offers and choose the right one. 

2. Consider what type of mortgage you need 

Not all lenders offer every type of home loan, so considering what your best mortgage fit might be can help narrow your options at the start. 

Home buyers with strong credit and stable income often find conventional loans to be the best option. If you’re a first-time home buyer or have a lower-than-ideal credit score, an FHA loan may be a better fit. Alternatively, VA loans offer exclusive benefits for eligible military service members, while jumbo loans are designed for higher-priced homes that exceed conventional limits. 

3. Learn about lender types

The type of lender you choose can influence your rate, loan options, and overall home buying experience.  

Common lender types include: 

• Direct lenders, like AmeriSave, work directly with borrowers to originate and fund loans. Direct lenders usually offer a more streamlined process and greater client control — from applying to closing. 
• Mortgage brokers serve as agents between home buyers and multiple competing lenders. They can help you compare several loan offers but usually charge a broker fee. 
• Credit unions often provide competitive rates and personalized services, but their loan options may be more limited. 
• Hard money lenders offer fast funding, but they’re typically used for short-term or investment properties. Also, they come with higher interest rates and stricter terms. 

Choose a mortgage lender based on your financial goals and loan type. If you know what kind of mortgage you need, you’ll be able to focus on lenders that specialize in that product. 

4. Ask the right questions to compare lenders

Once you’ve narrowed down your loan options and lender type, it’s time to shop around for a mortgage. Beyond interest rates, it’s the details that will determine how smoothly your loan process goes and how much you’ll pay over the loan term. 

Here are some questions you’ll want answered: 

• What is the current interest rate and annual percentage rate (APR)? APR gives you a fuller picture as it includes both interest rate and lender fees. 
• What fees are included in the loan estimate? Look for transparency and ask about anything that you feel is vague or excessive. 
• Do you charge points to lower interest rates? “Points” are fees that enable you to “buy down” the interest rate. While this can save you money in the long term, ask for break-even calculations to weigh potential benefits. 
• What’s your average closing timeline? Around 30 to 60 days is a standard timeline. Anything longer may delay your move or increase your risk of losing the home. 
• What’s the approval process like, and how long does it take? Most lenders can turn this around in one to three days. Digital processes can speed up this timeline. 
• Will I have a dedicated loan officer or point of contact? A single, responsive contact makes communication easier, reduces delays, and gives you peace of mind. 

During this step, you will also want to compare the following: 

• Origination fees and closing costs 
• Down payment requirements 
• Customer service reviews 
• Loan options, especially if you’re unsure what loan type is best 

5. Get preapproved for your mortgage 

Most lenders offer online preapproval, often completed in minutes. Until you sign closing documents, you’re not committed to a specific lender, so consult multiple mortgage companies. 

During preapproval, lenders pull your credit report and review your finances to estimate how much you may be able to borrow and provide a personalized loan estimate. This gives you actual figures to consider — numbers like loan amount, terms, and rates.  

Once you collect your documents for preapproval from one lender, you can reuse them to get preapproved by others. By collecting at least three preapprovals, you can compare specific offers for the best combination of rates, fees, and services. 

You can shop for a mortgage without hurting your credit if the lender only does a soft credit pull, but preapprovals typically involve a hard inquiry. If multiple inquiries happen within a 45-day window, credit scoring models treat them as a single inquiry. This part of the process does have a small negative effect on your credit score, so you should only request preapproval if you’re in a position to buy. 

Why shopping around is worth it 

Taking time to shop around and compare mortgage lenders can lead to big savings not just in interest rates, but also fees and closing costs. Even a small difference in your rate could mean thousands of dollars saved over the life of your loan. 

The best lenders will also provide you with speed, flexibility, responsive support, and a smooth path to closing. And remember, a mortgage is a long-term relationship. By knowing how to choose the best lender, you’re setting yourself up for less stress now and in the future. 

What sets AmeriSave apart 

AmeriSave combines the ease of a digital-first experience with the reassurance of real human support, ensuring you get the best of both worlds. With fast, secure preapprovals, competitive rates, and no hidden fees, AmeriSave is committed to making your home buying experience smooth and transparent from start to finish. 

Ready to see what your ideal mortgage looks like? Get preapproved today and take the next step toward owning your home. 

Frequently asked questions 

What factors should I consider when choosing a mortgage lender? 

Interest rate is incredibly important, but don’t make it your only focus while shopping for a mortgage lender. You should also consider fees, loan options, closing timelines, preapproval speed, and overall customer service and satisfaction. A great lender is transparent, responsive, and offers the type of mortgage that fits your needs.  

Should I get preapproved before choosing a mortgage lender?

Yes, preapproval is an important part of comparison shopping. It allows you to see what loan amounts, rates, and terms lenders can actually offer you before making your final choice. To minimize the impact on your credit, request all preapprovals within a 45-day window.