If you read the last article that focused on where to start as a homebuyer, you knew this topic was coming. Almost daily I talk with people who have found a lender, are looking for a lender, or just finished purchasing with a lender. What I always find interesting is how most of the time they randomly found them online, or in some other disconnected way. Sometimes people are lucky and end up with someone amazing, other times they end up missing out on the true nature of mortgage guidance and end up just getting a transactional loan that may or may not align with their goals. Furthermore, most people don't know what to ask other than what is your rate or fees?Verify my mortgage eligibility (Feb 29th, 2024)
Finding the right partnership in a loan officer can truly be the make or break in obtaining the home of your dreams or the right mortgage loan that will not cost you more money than it should. So how do you find one and what to you ask? Most people do not want a loan, they want a home. As a result, most people find their home first by searching online, fall in love and then find a Realtor and last find a lender. With the massive advertising budgets of online and warehouse call center type lenders, sometimes buyers browsing online will end up the target of online adds and funnels resulting in pursuing a simple pre-qualification with one of those sponsored ads. Often this can result in shopping before truly completing a thorough pre-approval and knowing what the best path to homeownership.
"But if I get a loan and buy a home, why does it matter?" Likely a question that is asked or thought of a lot. To answer this, it is important to understand what the loan officer should be doing for you and in the partnership with your Realtor. How to find your loan officer and what to ask them.
First let me clarify some of the titles that exist out there. I personally am a Mortgage Strategy Advisor. Why? Because I specialize in putting together the most beneficial mortgage strategy and advising my clients on that not just taking then through a transactional loan. Is it different than a loan officer, lender, loan advisor, senior loan officer, and all the other titles that exist in the industry? For me, absolutely because it clearly says how I approach the loan process for my clients. However, all the previously listed titles can help you get a mortgage loan, so that is important to know. Sometimes titles are given or managed by the company, so I would not get too caught up in what they are as much as who they are and how they choose to serve you in the process. From there, how do you find someone?
I think almost every loan officer would agree that it is important to partner with someone that knows your market. This is not to say they live there or are "local" however they truly know your area. As someone who has grown up in Tehachapi, I know this market well; I know loan limits, loan programs, how value differs by neighborhoods etc. I also know many areas of Montana and Texas very well too and serve clients there, not as a local but with the same level of familiar service and understanding. So, make sure they know your market as it can have an impact on loan programs, agent partnerships, and guidance they can give you about the strength of the market itself.Verify my mortgage eligibility (Feb 29th, 2024)
Evaluate the partnership as a whole team. Although you spend more one-on-one time with your agent, there will be a very intimate personal interaction with your lender. The main reason is that you are divulging all your personal and financial details to your lender. It should be a treated more as matchmaking activity than a transaction and the agent the same. Different personalities, different schedules, different communication styles can all come into play in creating your perfect team partnership for your purchase process. Anytime I see someone post in a Facebook group asking for a lender or agent referral, the first question that comes to my mind is not who I know that is so amazing, but who is the person asking and what is going to be the right fit for them? I know agents and lenders that never work Sunday, what if that is your main day off? I know lenders that will not work after 5pm, what if you get off at 5pm and like to communicate more than just by email? Different loan officers specialize in different loan programs, agents can specialize in buyers or sellers. All these things become factors in creating your partnership and team. Ask them about their business hours, what loans they specialize in, how they are willing to communicate. These questions can help you figure out the teamwork and partnership dynamic that is going to fit you personally.
Everyone has a weakness as well, do not be afraid to ask the loan officer what those may be. I can honestly tell clients that my weakness is providing information overload. I pride myself on being transparent and educating clients, so I tell everyone upfront that I will try to be sensitive to when I am giving them information overload. If they are open and honest, you will know what to expect and can manage those expectations accordingly.
In addition to knowing about your loan officer, you need to know about their support. Is this person a one-man band, if so, how many people do they work with at once? You do not want to potentially be the one too many that results in someone being too busy. We all have busy days here and there, but are you okay if someone has minimal communication over the entire process? If they have a support team, what does that look like? Will you interact with them as well, what should you expect from them and the role they have in your experience. What is their experience level and their responsibility? Does the loan officer stay involved? I personally shopped for a loan once a few years ago and landed with a company that passed me off 5 times in the transaction. First was the sales pitch intake person, then the document collecting person, then loan officer-briefly for like 2 calls, then processor and I never talked to the previous person again. I felt like I was on an assembly line, but I chose the low rate amongst the 5 places I talked to and the headset jockey was so friendly (face palm now). Being in the business sometimes we even fall into the trap, it is why I have the ability to serve other states now, so I don't do that again! More importantly, I want to empower you so that you can avoid that experience as well.
To wrap this up, rate and fee should be the last question you ask once you have established that the person you are going to partner with is a good fit for you personally, the area you want to buy in, the agent and other people you want to work with, and has competitive rates and fees for your situation.Show me today's rates (Feb 29th, 2024)