All mortgage lenders are not the same. Not only do they offer different rates — one study found that on a given day, mortgage rates can vary from .375% to .625% between lenders – they offer different experiences. Good lenders are highly professional and their loans progress quickly and smoothly. They want to understand your needs in order to make the right recommendations. The best mortgage lenders interview you thoroughly, complete your application quickly, and request everything they need from you upfront. Bad lenders call every other day for new documents, neglect to provide or explain the loan’s disclosures, or drop into black holes and stop returning your calls.
Naturally, you want a good lender and not a bad one. But how to you find a good lender?
First Things First: Rates, Ratings and Reviews
The most expedient way to vet a batch of mortgage lenders is online. Not only can you get a fistful of competitive mortgage quotes in a very short time, you can check out lenders’ reviews and ratings.
You’d probably like dealing with the mortgage banker that got this review:
We could not be more pleased with the way in which Joshua, our mortgage advisor, handled our refinancing. He patiently reviewed and explained all of our options, reworking scenarios when necessary, and walked us through every step of the way. He was always available, answered questions thoroughly, and made the process easy and even fun. I have already recommended him to a friend. Thanks so much!!
And you’d want to kick this mortgage broker to the curb:
Sky high closing costs!
I was charged an arm and a leg in costs and fees. I had an FHA loan and ended up paying almost 8% at closing. I will not recommend this lender to ANY acquaintance of mine. I was not explained that I was being charged points and given the “so called cheaper” rate. I did not even receive my Good Faith Estimate until a week before the day of closing.
Next Things Next: 5 Crucial Questions
Once you’ve winnowed your list of lenders to two or three, you can interview the loan officers and mortgage brokers, making sure that you get someone whose communication style and personality is harmonious with yours. It’s difficult to discuss personal issues like your salary and child support arrangements with someone who makes you queasy. It’s much easier to talk money with someone you like and trust. Here’s what you need to find out:
Can I get a Good Faith Estimate today? Some lenders only give GFEs to people if they apply for a loan, while others provide the forms to anyone who asks. This demonstrates a higher level of customer service, and a GFE offers more consumer protection than a worksheet or scenario.
How quickly can I expect calls to be returned or my emails to be answered? Your lender’s communication style should mirror yours. You don’t want someone calling you during dinner about an email you sent that morning, or texting you about a rate change when you wish to be called.
Can I get my closing documents ahead of time and review them at home? This makes your closing smoother and takes some pressure off. If you don’t understand a provision in your loan, it won’t help if an escrow agent, Realtor and the seller are all there breathing down your neck and drumming their nails.
What is your procedure for locking in my loan, and will you keep me informed when mortgage rates change? You should be able to lock your loan over the phone, and you should receive written confirmation that your loan is locked.
What loan product do you recommend for me, and why do you recommend it? This is a biggie. Every loan product – FHA, hybrid ARMs, Community Homebuyer, etc. – is the best loan for someone. Don’t settle for a lender who automatically puts everyone in the same mortgage program because it’s easier.
You should be able to judge the loan officers expertise and helpfulness from these answers. Choose the person who puts as much effort into his or her work as you do!
Author Bio: Gina Pogol spent over a decade in mortgage lending, originating, processing and underwriting home loans. She has written about mortgage rates and finance issues for a number of publishers since 2006. Currently a senior marketing manager with Lending Tree, Gina advocates for consumers and loves answering their mortgage and personal finance questions.