Don’t Be Fooled – Not all Lenders are the same
Well, you may be thinking – hey, I’m a smart enough person – how on earth could I be fooled? And who would want to fool me?
Excellent questions – here are some answers.
Buying a home or refinancing is one of the largest financial decisions you will make in your life – and unfortunately, this means you may experience some stress as you approach these decisions. As in many other industries, the mortgage industry has more than its share of unethical individuals that are out to make a buck, but do not have your best interest at heart, and may try to take advantage of your stress at this point in your life. For example, we have heard numerous stories about people being called and told that they need to “quickly come into the office and get all the paperwork signed, rates are changing”. Not true – you should never be made to feel panicked or pressured about making this size of a financial decision. If you are truly ready, a rate can be locked right over the phone.
Advertisements in the newspaper or online are also rampant with misinformation, designed only to get phones ringing. Rates change daily, sometimes hourly, so just by virtue of being in print somewhere, they are almost sure to be outdated. The trick is, lenders can put anything out there, and if it gets the phone to ring, that is all they need. The following conversation ensues…”Hello, I’m calling about the 7% rate I saw that you advertised in Saturday’s newspaper?” “Well, it’s wonderful that you called! Rates did change a bit this morning, and are now at 7.5%, but let’s talk a little more about you…”
Lenders will also frequently promote “free appraisals” or “discounted origination fees”. This is great, but BE AWARE that if you are not paying for it one place, you are paying for it somewhere else. Interest rates and closing costs go hand in hand, so it is important to look at the overall loan package, not just one individual item that seems discounted. We all work off the same financial markets with essentially the same profit margins. Do we make money when we do your loan? Certainly, just like you get paid for working at your job. What we seek for you is the best balance between a great interest rate and reasonable closing costs.
Online lending is also particularly scary – ANYONE can throw up a mortgage website, but be aware that the person behind that great rate you are seeing online might be some guy working out of his basement in Florida who has been in the business for 6 months. For example, closing costs vary significantly state to state – out of state lenders frequently misquote fees, as they are not aware of local and state requirements. I have personally been involved in bailing out several individuals who were lured in by an offer that seemed too good to be true, but then the lender could not come through at the closing. We have been in mortgage banking for many years, and I would not trust my own loan to an online, unknown lender. Are you really willing to take this risk?
Is buying a home stress free?
Absolutely not! Purchasing a home is a major financial commitment, and moving is a major life event. What we desire is that your stress will not be in any way related to your home financing – save it for which new sofa you should choose or what color to paint that hideous bathroom.
Are we the cheapest place in town?
No, but we are always very competitively priced. We believe that to a certain degree, you get what you pay for. Consider this: Have you ever been on a taxi ride? How about a limo ride? Did they both get you where you wanted to go? Probably, but my guess is that you enjoyed the limo experience, and tolerated the taxi ride. Which driver would you recommend to your family, friends, and coworkers? Probably not the taxi driver, even though he was a few bucks cheaper. My desire is that your experience with us is one you will enjoy, and would be excited to refer us to others. Our service to you is not only to provide you with competitive rates and costs, but to handle your transaction with the personal care and professional treatment you deserve.
What about the horror stories we have all heard about?
At the last minute, the loan is suddenly not approved, or the rates and costs change dramatically? Or worse yet, the loan falls through entirely, and the transaction falls apart? Unfortunately, it happens – we hear the stories too. This is exactly why it is so important to trust your business to a professional, not a bargain basement operation. A horror story like that has never happened to one of our clients, and you will not have surprises at the closing table.
How do you know I will do a great job for you?
Almost 100% of our business has been referred to us by either a satisfied former client, or an experienced, high quality realtor – the only type of realtor we work with! Chances are, you did not stumble across our website by accident, as we do not promote ourselves blindly to the general public. While most loan officers spend their time mass marketing and looking for new business from just anywhere, we devote my time and energy to our clients only, educating them, discussing the best loan options for each individual situation, and taking care of details to ensure that the loan process runs as smoothly as possible.
QUESTIONS YOU SHOULD ASK YOUR LOAN OFFICER:
• Do they have any underwriting experience?
• Do they charge for a pre-approval? (beware – they are doing this to hold “bond” money from you so that you feel obligated to continue doing business with them)
• Do they have the capability to offer many different investors rates and products, or just their own?
• How many transactions do they generally close on a monthly basis? (note: if they do not seem very busy, you should wonder why. Good loan officers are in high demand for good reason)
The answers to these questions should tell you what caliber of a person with whom you are considering entrusting the largest financial transaction you will make in your life. We would love to have the opportunity to discuss all of these questions and the many more you probably have, personally with you. Please call or email us at your convenience.