Choosing the best mortgage lender for you

The opinions expressed by entrepreneurs contributors are their own.

Securing the financing needed to purchase any type of property, whether it's an apartment building or a single-family home, can be a time-consuming and sometimes frustrating undertaking. The best way to reduce this stress and confusion is first-rate preparation. This means you need to focus on your own financial situation and do some research to identify the best lender for you.

No matter what type of property you intend to buy, it's all about understanding your options and knowing how to apply them to your particular situation.

For example, applying for a home loan is not much different from financing any other type of home purchase. You find a property you like and secure financing with a lender who's willing to give it to you - but you'll have a few more hoops to jump through, like deciding how many tenants can live there and finding the right location for an apartment.

Applying for a loan for a single-family home won't have these hassles, but there are other issues to consider, especially when it comes to whether you're going to make it your own primary residence or a rental property. . This will require a specific type of home loan called an "investment property" loan. If you plan to live there, great. If you plan to rent it, you will need to be transparent about your intentions.

Choosing a lender for your purchase is going to take some shopping as you compare rates, terms, and even loan scenarios. Ultimately, the borrower and lender will need to feel comfortable working together.

Let's see what this kind of situation could mean for both parties.

Related: How to Find the Right Loan Alternative for Your Small Business

Yes, you have a choice. Too many borrowers think that just because they are looking to buy an investment property, they have a limited number of choices. That's not true, many lenders are ready and willing to finance potential homeowners who want to enter the housing market.

Depending on your financial health, you may find it much easier to get a loan for a single family home than an investment property. For those who may be facing gaps in this department, I urge you to make your foundation much stronger before beginning this process.

Buying an investment property comes with additional criteria like the ones I mentioned above, as the lender will likely be trying to determine if the income generated from the property will be your primary source of income for repay the loan.

You should take extra care by considering the standards and practices of these lenders when applying for a loan. You can break it down into three basic types of lending entities – , banks and brokers. Here's how they each work.

Related: How the mortgage market is opening up to brokers

You will usually find the best rates for investment properties and home loans from these institutions. Credit unions offer financing opportunities to a specific group of customers who are members of the institutions. You'll often find that credit unions offer special memberships to active duty/retired military, religious groups, and even actors working in. Since these memberships are limited, it can be difficult to obtain financing from a credit union, unless of course you are an eligible member of that specific group.

Some credit unions serve a certain community, which makes membership a little easier to obtain, but you may still need to meet specific criteria to enjoy the benefits of working with that financial institution. 2. Banks

The option most of you will likely face is an institution. Whether you are working with a small municipal savings bank or applying to one of the larger national retail lenders such as or , banks can pose a number of challenges when it comes to getting the best favorable rates and conditions. Since most banks are direct lenders, they will issue the loan and fund it upon approval.

The rates you may be subject to may vary depending on the size of the bank, smaller institutions will often have more competitive rates and a willingness to work with first time buyers as opposed to...