This guest post is by my highly respected industry colleague, Chris Devin, a Senior Loan Officer with Guaranteed Rate. He is a nationally recognized industry speaker, a member of the President’s Club at Guaranteed Rate, and was recently ranked in the top 1% of loan originators nationwide by Mortgage Executive Magazine. Chris is also the host of REAL Estate Talk – Boston on “Money Matters Radio” 1120 AM. You can read his blog at https://www.guaranteedrate.com/blog and follow him on Facebook at www.facebook.com/devingroup.
Although you may have obtained a financing pre-approval letter from a lender as part of the process of determining what you can afford to buy and in conjunction with the offer process, you are not obliged to continue with that lender going forward. You can shop for a lender that is most appropriate for your particular needs even after you have an accepted offer. While interest rates and closing costs are important, there’s much more to the process of selecting a lender who is best-suited to execute what may be one of the largest purchases, if not the largest purchase, of your life.
Here are some important criteria to consider when selecting a mortgage broker, loan officer or loan originator:
Evaluate the experience and approach: Ask your family and friends for a referral to someone with whom they have had a good experience. You can also ask your financial advisor, accountant, attorney or your real estate broker to help you with a short list of lender referrals. These people deal with mortgage lenders regularly and can help you filter potential resources. Next, do your research. This is where the Internet can be helpful. Explore the lender’s personal website as well social media, including Facebook, Yelp and LinkedIn, which may also provide you with a better view on whether the lender is a right fit for you. Many loan originators will feature testimonials, experience and lending information on these media for perspective and insight. When you speak with a lender, make sure he or she is asking you a lot of questions about your financial situation, your financial objectives as a borrower, the goals for your property and the details about your purchase (i.e., down payment, your FICO credit score, etc.) before quoting you an interest rate. Make sure he/she is a good listener, too. If the prospective lender is not asking you a lot of questions, is not listening carefully to your responses and is just giving you a rate, you’re probably talking to someone with limited experience and it is best to move on.
Consider performance with on-time closings: It is important that your lender has experience and a track record of closing loans on time. There are banks and mortgage brokers in the marketplace right now that might offer competitive rates, but can’t execute the loan within a tight timeline, which might be critical to your transaction. The last thing you want to do is put the largest purchase of your life in jeopardy because the bank can’t get your loan to the closing table. Your lender should be checking in with you at least once a week to make sure you are on schedule and that he or she has all of the information and documentation needed to process your loan for an on-time closing.
Compare rates and closing costs given today’s market: When comparing rates among lenders, make sure that you are comparing apples to apples. You want to make sure that you are sharing the same data with each lender. Find out about lender fees, lock-in periods, points and qualification requirements for what is being featured. Understand that today’s market is very volatile and when comparing rates you need to do so within a close time frame. Right now, some banks are re-pricing loans multiple times a day, so the rate you are quoted in the morning might be different from the rate quoted in the afternoon. This is an example of the value and importance of aligning yourself with an experienced lender or loan originator who can guide you through the process and help you lock in at the best time for your particular transaction.
As a result of your vetting process, choose a lender whom you trust to accomplish your goals.