Answer: Personal referral. If a friend or family member has recently completed a refinance or home purchase, always ask how their transaction was handled. If they were pleased, you should give extra consideration to their lender.

While Realtors will usually refrain from "recommending" anyone, they can usually tell you which companies have performed well in the past. Because of the large number of lenders they have experience with, they can be an excellent source of referrals.

Go to the lender's office and interview the loan officer or manager.

Be sure you are comfortable with the answers you are receiving to the questions you ask. If you visit with a loan officer on the phone or in person and are confused, it is best to keep interviewing until you find someone who can communicate with you about the details of your transaction.

Be cautious about selecting a lender who has the "lowest rate in town." Most lenders will vary only slightly from day to day in the interest rates they offer. Sometimes you get exactly what you pay for. Take all of the extra time you need to shop for your lender. You will be up-close and personal with these people for quite some time.