Buying a home can be a whirlwind process, and with so many things happening at once, the last thing you’d want to do is make it more complicated than it needs to be. Since we’ve always advocated the importance of picking the the right real estate professionals to work with, we thought we’d share some hints to help you pick your lender, courtesy of the KCM blogging crew.
What type of company is it?
These days you can chose from a variety of institutions that offer lending services.
There are mortgage brokers, mortgage bankers and banks/credit unions. Mortgage brokers have been hamstrung by many of the recent regulatory changes and typically lack the actual ability to approve and/or lock a loan. Banks are usually limited in program choices and hamstrung by tighter underwriting. Mortgage bankers have the financial stability and direct lending capability of the bank coupled with the wide product menu and expertise of the mortgage broker. From a global perspective, I see mortgage bankers as a clear winner.
How does the company operate?
It’s important to work with a company that knows your area, is familiar with ins and outs of each neighborhood, and will employ affiliates (i.e. appraisers, loan processors, etc.) that are equally as knowledgeable about the local market. Save yourself from headaches down the road and ask the questions upfront.
What about the individual loan officer?
Having a good relationship with your loan officer can become the biggest factor to a successful transaction. How well do they education you about the process, the requirements, the factors that determine your approval or the interest rate you get? The last thing you want is to have someone you don’t communicate well with guiding you through an already foreign process. The KCM crew notes that, “This is difficult to determine on your own which is why the referral from another person who used them or your real estate agent has far more value than most people know (until it’s too late).”
Too many people stay focused on quoted rates and fees and neglect to see the whole picture of what is needed from a lender. KCM’s advice? “Look for great communication, superior information and education, understanding of the local market and someone who looks at your application as something more than a number. Be prepared to pay a little more to get a better experience (even though it might not cost you any more)….in the long run, lowering stress can be more important.”