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Choosing a Mortgage Lender


The Minnesota Department of Commerce has prepared this guide to help you better understand how to choose a lender for purchasing a residential home. This guide focuses on mortgage originators, which are licensed by the Department of Commerce. This guide does not list all the regulations required of mortgage originators.

If you have a question about a specific mortgage originator, please email the Department of Commerce at consumer.protection@state.mn.us.

Finding a lender

The Department of Commerce licenses mortgage originators, also known as mortgage companies or mortgage lenders. Mortgages are also available from other lenders, including banks and credit unions, which are regulated by other agencies. The department also licenses mortgage servicers who process the mortgage payments, among other activities.

There are several ways to shop for a mortgage company. If you are already working with a real estate agent, that agent might have recommendations for a lender. If you have a friend or relative who recently purchased a home, they could provide a referral. Or, look in the yellow pages of the telephone directory or watch for advertisements in newspapers and on television.

Finding the best rates

Comparative mortgage rate charts are published in the real estate section of many local newspapers, and it's a good place to start when looking for a mortgage company.

Not all lenders offer the same mortgage products. To make sure that you are getting the lowest interest rates and fees, meet with several mortgage companies to learn what products they can provide.

Questions you should ask include:

  • Is this the best rate and terms that I can qualify for?

  • Do I qualify for a better loan product that you don't offer?

  • Could I do better with a different mortgage company?

Check with the Department of Commerce

Before you select a mortgage company or an individual mortgage loan officer, call the Department of Commerce or check the website to see if they are licensed or if any actions have been taken against the license of the mortgage originator. Use our License Look Up Tool for license information.  Or use our Document Search Tool for enforcement actions. 

The Department of Commerce has the authority to "censure," or publicly reprimand, a mortgage originator for failing to abide by the law. If further violations occur, the mortgage originator's license can be suspended or revoked.

How to file a complaint

If you have a complaint against a mortgage originator, write a letter to the Department of Commerce explaining the complaint. In your letter, write the details of the dispute and include as many facts as possible such as dates, what was said, etc. Include a phone number where you can be reached and your mailing address. In addition, attach copies of any documents to support your complaint, such as mortgage applications, advertisements or cancelled checks.

You are welcome to call the department with questions about a problem you may be having; however, an investigation cannot begin until the department receives written documentation of the problem. If you have questions, call 651-539-1600 or 1-800-657-3602.

Consumer Resources

Minnesota Housing Finance Agency offers below-market loans to buyers with low or moderate incomes and to first-time buyers. Call 651-296-7608 or 1-800-657-3769.

Home Ownership Center provides a confidential review of your finances and helps determine what mortgage loan programs will be the best. Call 651-659-9336

Minneapolis Community Planning and Economic Development Agency offers information about housing and low-interest mortgages for Minneapolis residents. Call 612-673-5095

St. Paul Housing Information center provides low-interest mortgages, education and counseling for residents of St. Paul.651-266-6000

Farmers Home Administration offers mortgage loans for low-income rural residents. Write to: FmHA, US Department of Agriculture, Washington, DC 20250.