Buying a home is exciting—whether it’s your first step into homeownership or your next move up. But while most buyers spend a lot of time thinking about neighborhoods, floor plans, and school districts, there’s one crucial piece that often gets overlooked until the last minute: choosing the right lender.
Your lender isn’t just handing over money. They’re a key partner in your homebuying journey—and choosing the wrong one could cost you thousands more than necessary. So let’s talk about how to find the right mortgage lender and steer clear of those sneaky high-fee traps.
First Things First: Why Your Lender Matters
Indeed, interest rates are a significant concern. But there’s more to it than that. A good lender will:
Offer competitive rates and transparent fees
Walk you through your options without pressure
Close on time (which your seller will love)
Be responsive and communicative during the process
Help you understand what you can actually afford, not just what you qualify for
In short, the right lender makes your life easier. The wrong one? Stress, delays, unexpected costs, and possibly even losing the house you want.
Red Flags: How to Spot a High-Fee Lender
Not all lenders are created equal. Some stack on unnecessary fees, hide key details in the fine print, or push you toward loan products that benefit them, not you. Here’s what to watch out for:
- Vague or Missing Loan Estimates
If a lender won’t give you a clear breakdown of the loan estimate (including all the fees), that’s a red flag. You should be able to see:
Origination fees
Underwriting fees
Discount points (if any)
Appraisal fees
Closing costs
Transparency is non-negotiable.
- Sky-High Origination Fees
A typical origination fee is about 0.5% to 1% of the loan amount. If you’re seeing numbers above that—and you’re not getting anything special in return—walk away.
- Pressure to Use "In-House" Services
Some lenders offer incentives for using their preferred title company, attorney, or insurance broker. That’s not necessarily bad, but if they pressure you or make it sound mandatory, ask why—and shop around.
- Too-Good-To-Be-True Rates
Low advertised rates often come with high fees or require you to pay “points” (extra upfront money to reduce your rate). Ensure you’re comparing all-inclusive costs, not just the interest rate.
How to Compare Lenders the Smart Way
Here’s a simple step-by-step guide to help you make an informed choice:
✅ Get Pre-Approved by More Than One Lender
You’re not locked in by getting pre-approved. It’s smart to compare at least 2–3 lenders so you can see the differences in rates, fees, and service.
✅ Ask for a Loan Estimate
Within 3 days of applying, each lender must give you a standard Loan Estimate form. This lets you easily compare fees, rates, APRs, and total costs side-by-side.
✅ Look Beyond the Rate
Focus on the APR, not just the interest rate. APR includes fees and gives you a clearer picture of the loan’s true cost over time.
✅ Read Reviews and Ask Around
Real-world experience matters. Look for reviews online, and don’t be shy about asking your real estate agent (or friends and family) for recommendations.
✅ Ask Questions—and Expect Answers
A good lender won’t rush you. Ask about any fees you don’t understand. Ask what happens if your loan doesn’t close on time. Ask about rate locks and underwriting timelines. If they get defensive or evasive, that’s a bad sign.
Bottom Line: You Have the Power
The lending world can feel intimidating—but remember, you’re the customer. You have the right to shop around, ask questions, and choose the lender that’s best for you. Don’t settle for the first name someone throws at you. Do your homework, understand the fees, and partner with someone who’s truly in your corner.
After all, your mortgage is likely the biggest financial commitment you’ll ever make. Choosing the right lender isn’t just smart—it’s essential.
Todd Besancenez
Broker/Owner
Intertech Properties, LLC
314-575-6398