When you're applying for a mortgage and working toward closing a home sale transaction, you need a dependable lender.

Mortgage providers aren't simply a source of money. They are crucial to several steps of the home buying process, including the home appraisal and closing the transaction. Consequently, you need to select a lender that not only offers a competitive interest rate but also the support you require as you work toward becoming a homeowner.

Here are some tips for evaluating your lender options:

  • Read reviews on mortgage providers. Like a home inspection gives you a report on the condition of a house you're considering, reviews tell you how well lenders perform. You can examine ratings from the Better Business Bureau, which is a nonprofit organization that gives consumers accurate and detailed information about businesses in the U.S. and Canada. There are also review sites that contain valuable information. Remember to read both positive and negative reviews and take all reports from other consumers with a grain of salt. Factors besides a customer's interaction with a lender can affect the rating.
  • Consult friends and family. If you know anyone who recently bought a home, ask this individual about his or her experience with a lender. Based on the response, this mortgage provider can be added to your list of choices.
  • Ask your real estate agent. Over time, real estate agents gain a list of lenders they know will keep their clients' best interests in mind and help facilitate a fast transaction. Check with your agent for two or three lenders to start your search. Furthermore, some real estate brokerages have an in-house representative from lenders that partner with them.
  • Request a good-faith estimate. Once you've narrowed down a few options, you can start thinking about costs. Ask your options to send you a GFE, which lists approximate expenses of getting a mortgage from the lender. Mortgage providers are required by law to give you a GFE, and it will include details about closing costs, interest rates and other fees.
  • Evaluate the customer service. In addition to requesting a GFE, make a few calls to lenders to gauge how well they treat their customers. Ask questions about the application process and determine how responsive, knowledgeable and helpful the representatives are.