How to Choose a Mortgage Lender in VT & NH

Union Bank Residential Lending Team June 3, 2020

Looking to buy your first or next home in Vermont or New Hampshire? One of the most important decisions you’ll make is the choice of a mortgage lender.

Just as a real estate agent guides you through the process of choosing a home and making an offer, your mortgage lender helps you navigate the mortgage application and closing process.

Buying a home is an exciting time but it can also be stressful. Luckily, the process can be a lot smoother when you have the right mortgage lender.

Ready to get the criteria for choosing your best match in a lender?

In this article, we’ll cover types of lenders, mortgage questions, and state loan programs in Vermont and New Hampshire.

Shop Around for Lenders and Mortgage Options

When it comes to finding a mortgage lender, homebuyers have plenty of options. That means you can be picky–look for a lender who has a proven history of expertise, reliability, and financing options for your specific situation.

For example, first-time homebuyers will want to find “a lender that knows the ins and outs of first-time home buying and makes you feel comfortable with the process,” says Melyssa Whitcomb, VP, Residential and Consumer Loan Officer.

The Internet makes it easy to compare current rates and, while there’s nothing wrong with getting a rate quote from more than one lender, don’t focus on one metric to the exclusion of all others. “It’s about the rates and fees together as well as local service,” says Kelly Deforge, Senior Mortgage Loan Originator.

Know What Kind of Lender You Want or Need

As you compare lenders, it helps to understand the different types.

Mortgage Lenders work for banks or companies that lend money to a borrower for home purchase and set mortgage terms, interest rates, conditions, repayment schedule, and lending fees. Can take care of the entire process in-house. For example, the in-house lenders at Union Bank make themselves available to answer your questions, explain the different mortgage loan types, and discuss your hopes and dreams.
Mortgage Brokers are independent, licensed professionals that serve as a matchmaker between lenders and borrowers. They are paid on commission by either the borrower or lender, but not both. Brokers can look for lenders and/or loan programs that are tailored to your situation. They also have relationships with lenders that could help you get competitive rates and terms. They do not fund loans; they don’t set interest rates or origination fees.
Retail Lenders, aka Direct Lenders. They sell their own mortgage products directly to borrowers. For example, Quicken Loans is a retail lender.
Correspondent Lenders originate and fund their own loans but quickly sell them to larger lending institutions after the loan closes.

Benefits of Working With a Local Mortgage Lender

“You want to work with a local lender–someone you can stop in to see or pick up the phone and call and know that you are going to get an answer,” says Melyssa Whitcomb.

Personalized Experience: Local lenders are able to work face-to-face with their clients and are more hands-on than a larger lender might be. You always have someone available to answer questions and explain uncertainties. For example, at Union Bank, our lenders are always willing to go the extra mile for customers. “Folks can call me anytime with a question and if I can’t answer I quickly find someone who will. Union Bank remembers these are people’s lives we’re working with every day, and that is so important,” says Kelly Deforge.
Local Knowledge & Expertise: Local lenders will be more aware of lending risks for certain areas. They have relationships with local real estate agents that can be helpful when looking for properties or if there are any issues during the home buying process. When asked why she thinks more Vermonters choose Union Bank for mortgage loans than any other Vermont bank, Melyssa says, “Our lenders are familiar with the mortgage process and offer assistance from start to finish.” Kelly says “At the moment, inventory is low, so it’s more important than ever to be prepared!” Of course, “things can change on a dime,” so it pays to work with local experts who follow regional trends closely.
Reliability: Local lenders often live in the same communities they serve, and represent financial institutions who exist to help these communities thrive. Their local reputation is both earned and personal.
Timely Turnaround: At Union Bank, all of our lending decisions are made locally, which helps to move the process along. In general, community banks and other local lenders can be more responsive throughout the process, especially when issues arise. Local relationships with real estate agents and title companies can also move the process along faster.

Vermont & New Hampshire State Specific Loan Programs

Union Bank is a participating lender in the following state loan and down payment assistance programs. Please note that this information is current as of the publication of this blog article. If you are interested, please contact us for the latest information.

Vermont Housing Finance Agency (VHFA) Mortgage Program Options

VHFA ASSIST: An interest-free loan to help first-time homebuyers.
VHFA Advantage: The most flexible program from VHFA with a low – down payment. Save $825 on Vermont Property Transfer Tax at closing.
VHFA Mortgage Credit Certificate (MCC): Receive a tax credit of up to $2,000 each year.
VHFA MOVE MCC: Annual tax credit of up to $2,000 plus other VHFA benefits.
VHFA MOVE: VHFA’s lowest interest rate loan.

New Hampshire Housing Finance Authority (NHHFA) Mortgage Programs

NHHFA Home Flex Plus (FHA, VA, RD): Cash assistance for up to 3% of base loan amount to help with your down payment and closing cost. Limited to household incomes up to $128,900.
NHHFA Home Preferred Plus (Conventional): Cash assistance for up to 3% of base loan amount to help with your down payment and closing costs. Limited to incomes up to 80% of Area Median Income (AMI).
NHHFA Home Preferred: Provides 97% Loan-to-Value (LTV) conventional mortgage financing with low, discounted mortgage insurance options. Offers lower monthly payments compared to other conventional/government-insured loans. Ideal for purchasers or those refinancing who are seeking a low monthly payment with a reduced mortgage insurance premium.
NHHFA Purchase Rehab Mortgage: Allows you to add up to $35,000 to your purchase mortgage, with as little as 3.5% down, to assist with repairs and upgrades. Government mortgage option. Program for borrowers with incomes up to $128,900.
NHHFA Home Start Homebuyer Tax Credit: Can decrease the federal income taxes you owe, thereby boosting your take-home pay, which may help you qualify for a mortgage and make your mortgage payments. This program is not a one-time credit—it is an annual credit for the life of the original mortgage, as long as you live in the home.
NHHFA Home Preferred Manufactured Housing ROC’s: Provides homebuyers and current homeowners in qualified New Hampshire Resident-Owned Communities (ROCs) with affordable conventional financing options, including a low fixed rate, low down payment, and low mortgage insurance options. Serves borrowers with incomes up to 80% Area Median Income (AMI).

Questions to Ask Your Mortgage Lender

Don’t wait until you’ve found your dream home before talking with your lender! As Senior Mortgage Loan Originator Sue Ryan says, “Lending rules are constantly changing, do not assume you can get approved. Talk to a loan officer before you start to shop.”

1. Which mortgage is best for me?

The answer varies by individual. Ask your lender to recommend specific loan options and review the differences. Understand the advantages and disadvantages of each loan option.

2. What assistance programs do I qualify for?

Ask about state-specific loan programs and what the eligibility requirements are.

Find out if any assistance programs can be combined to maximize benefits.
Make sure your credit rating and current finances are in good standings. Some assistance programs may require a minimum income or credit score.

3. How much of a down payment is required?

Varies based on the type of loan and loan amount – many affordable housing programs allow for less than the typical 20% down payment.

Putting down less than 20% can mean increased closing costs and increased monthly payments until you get to the 80% equity threshold.

4. What will my interest and annual percentage rate be?

Understand base interest rate and annual percentage rate (APR). Ask what is included in the APR calculation.

Have your lender explain the factors that go into deciding your interest rate.

5. Should I lock my interest rate?

If you’re buying a home and suspect the interest rates could change then you have the option to pay your lender to lock your interest rate.

If the interest rate increases before the lender processes the loan, your interest rate won’t change.

6. What are all the costs?

Cost of loan includes fees that go to the lender plus third – party vendor fees – appraisals, credit check, title fees, home inspection fees, taxes, etc.

Ask for a detailed write up of all the costs included in the loan and closing before you begin the loan application process. You will also receive a Loan Estimate once your application has been completed.

Meet your local mortgage lenders at Union Bank

At Union Bank, being local means we can make life easier and more convenient for our customers. Our Vermont and New Hampshire-based mortgage lenders have helped generations of homebuyers just like you. Contact our mortgage lending team today to get answers to your questions and learn more about the full range of home loan options from affordable housing loans to Jumbo, Build, and HELOC available from Union Bank.