Choosing a lender - and helping that lender get the job done…
Lenders are everywhere… your mailbox is probably full of offers, as is your e-mail in-box. Newspaper advertisements scream for your attention.
Each one offers something more fantastic than the last. Low interest rates, no closing costs, bad credit allowed … anything and everything to make your life easy and unencumbered.
How can you choose?
Use your own feelings
Begin by choosing two or three that sound reasonable, and calling them. See if they will take the time to talk with you and answer your questions. If they're too busy for you, move on to the next one, because they'll also be "too busy" when you need them to get your loan closed on time.
Next, see how comfortable you feel talking with that person. If they come across as warm, friendly, and sincere, you'll feel good working with them. If they have an attitude problem, you won't. If they make you feel like they're doing you a favor, move on. Remember, they are being paid to do this job for you.
Many people have a fear of "bankers" that goes back generations, and that fear transfers to loan officers at mortgage companies. Some lenders still play on that fear to make you feel subservient… and that's nonsense. Don't put up with being treated poorly when there are dozens of other lenders to choose from.
Examine the loan costs
Once you've chosen 2 or 3 lenders you feel comfortable with, it's time to check out their fees. Just because someone is pleasant doesn't mean they can or will give you the best pricing.
Honest lenders have fees. Dishonest lenders have exorbitant fees."
You won't be able to get a "good faith estimate" until you've gone to the lender with a purchase and sale agreement, but you can ask for a rundown on their fees. Write them down as you listen, and compare one to the other.
This is important. Excess fees can add as much as $5,000 to your overall costs.
That said, remember that you have choices. You may pay more up front in order to obtain a lower interest rate. Do the math on each option to see which option is best.
Once you've chosen, be helpful
Your lender will ask you for certain documents, both at the first visit and later on. Be sure that you supply each document promptly. He or she is not being snoopy. These are documents that the mortgage company has requested and without them your loan process will come to screeching halt.
Listen carefully to the advice you're given. This is especially important with regard to your credit score, and people have ruined their chances for purchasing a home by failing to heed this advice.
If your debt to income ratios are tight, your lender may tell you to pay off specific bills and make only a minimum payment on others. Listen and do as advised. Credit scoring is a complicated process that makes no sense to most of us. Your lender, however, understands how it works and knows what you should do to qualify for the best possible rates.
Whatever you do, when you're in the process of buying a home with a mortgage, do not allow anyone else to access your credit report. This means do not shop for a car or new furniture for the house unless you're prepared to pay cash. If anyone asks for your Social Security number, tell them no.
Every time someone accesses your credit report, your score will go down. That could result in a higher interest rate, or even stop your loan entirely.
Once your loan has closed, you can go shop for that new furniture!
Click here to contact me if you have any questions.
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