Choosing The Right Mortgage Lender For You
Borrowing money to buy or refinance a home is a huge financial decision. So, rather than simply walking into a bank or mortgage company to start shopping for loans, a smarter approach would be to do some research before carefully choosing your loan officer.
Dont leave such a serious undertaking to happenstance. You need someone who will fight to get you the best deal possible without any hitches. Ask for recommendations from trusted friends and family, or go online and read some reviews, then conduct some interviews to narrow down your prospects. Here are some questions to ask a potential loan officer to help you select the best one for you:
SEE ALSO: What Your Mortgage Lender Isnt Telling You
1. What Is Your Professional Experience?
It would be best to find someone who is a full-time loan officer with an established track record,
both in the lending industry and their current company. This shows a proficiency at loan processing as well as a familiarity with their companys available loan products. Also ask about their educational background or training, and if they are licensed or hold membership in any mortgage industry trade associations. The National Mortgage Licensing System, for example, was established to help protect consumers from incompetent or unethical lenders.
2. How Many Lenders Do You Work With?
Loan officers are basically intermediaries between a borrower and a lender; therefore, a loan officer can work with several lenders at a time. A loan officer that has ties to more than one lender can offer you more options and more opportunities to find the best loan to suit your needs.
3. What Loans/Mortgage Programs Do You Recommend For Me?
You want to go with someone upfront and honest
. If they start pushing loan options on you without even asking about you or your financial situation, its most likely they wont have your best interest in mind. If they analyze your needs, finances and credit first, and can explain everything to you in a way you can understand, laying out the process and expectations on both sides, its a good bet theyll work hard to meet your needs and keep you comfortable throughout the whole process.
4. What Are Your Fees?
If you are offered a quote that sounds too good to be true, ask about any additional fees. The payment of a loan always includes associated costs,
which can include:
- Title fees
- Escrow deposits
- Credit reports
- Inspection reports
A list and estimate of these fees will be included in the Good Faith Estimate each lender is required to give you after applying for a loan. It is against the law for a loan officer to withhold the details of these extra cost, so if they fail to inform you, it would be better to go with someone else.
5. What Is Your Lock-In Period?
When a loan officer gives you a good quote on an interest rate, ask how long the lock-in period is on that quote. Loan rate locks will keep your rate at the quoted price for a certain amount of time. Since interest rates fluctuate, it could be possible for the rate to rise by the time your loan goes through.
You may be charged an additional fee for the lock-in, but it will most likely be better than having to pay a higher interest rate. If you do choose to lock in your rate, dont forget to get it in writing.
6. How Long Will It Take You To Close The Loan?
A lender who does not close a loan transaction within the given time can cause you extra problems and expenses.
Not only can your interest rate go up if your lock-in period expires, you can also be stuck with rescheduling or cancelation fees, and another payment on your previous rent or mortgage. Worst of all, if a buyer does not close on time, they are in breach of contract, giving the seller the choice to cancel the deal. Although it is unusual for a seller to cancel merely due to a delay, it would be less stressful and more convenient to find a loan officer that can guarantee on time closing.
SEE ALSO: Yes, You Can Change Mortgage Lenders Before Closing
7. How Can I Communicate With You?
Establishing a good communication with your loan officer is very important. You want someone willing to answer all your questions and concerns
in a clear, satisfactory manner, as well as someone who will be available when you need them. Ask if you can reach them through phone or email during the evenings and weekends, and find out if there is any possibility theyll be unavailable for an extended amount of time, or if they plan on going on any vacations before your loan closes. After all, you dont want someone unreachable or unreliable.
Its a good idea to shop around if you find it difficult to communicate with a loan officer. Find someone you are comfortable with and can trust with your financial investment.
Someone can have all the qualifications and credentials in the field, but if youre not comfortable with their style or strategy, look somewhere else.