Traits of Good Lenders
Real estate brokers, agents and others in the real estate trade, as well as other borrowers that you know, can serve as useful references for steering you toward the top-notch lenders and away from the losers. As you solicit input from others and begin to interview lenders, seek to find lenders with the following traits:
- Straightforward: Good loan agents explain their various loan programs in plain English without using double-talk or jargon. They help you compare their loans to their competitors' loans. Run as fast as you can in the opposite direction from mortgage officers who talk down to you and try to snow you with lots of confusing lingo.
- Approve locally: Good lenders approve your loan locally. They don't send your loan application to an out-of-town loan committee, where you're transformed from a living, breathing human being into an inanimate loan number. Good lenders use appraisers who are familiar with the local real estate market and have experience appraising the types of properties that are commonly sold locally. Good lenders actively work with you and your agent to get loan approval.
- Market savvy: Good lenders understand the type of property that you want to buy. Here's another big advantage of local loan approval: No deal-breaking, last-minute loan cancellations unexpectedly arise because you inadvertently run afoul of some obscure institutional policy.
This type of snafu generally occurs when a mortgage broker tries to find the loan with the lowest interest rate currently being offered anywhere in the universe. Finding the loan is relatively easy. Getting the money, on the other hand, is nearly impossible, because you don't know what bizarre quirks lie buried deep in the loan documents' fine print.
These quirky loans usually apply to absolutely pristine property. For example, an out-of-state lender once approved a loan subject to having all corrective work completed and the house painted inside and out prior to closing. Given that the loan was approved on Monday and the sale was scheduled to close Friday, there was no way that the work could be completed in four days.
Competitive: Good lenders are competitive. Don't be afraid to ask the lender that you like best to match the interest rate of the lowest-priced lender you find. At worst, the lender will turn your rate request down. At best, you'll get the lender you want and the loan terms you want. Loan rates and charges are negotiable.
Detail-oriented: Good lenders meet contract deadlines. They approve and fund loans on time. Your agent knows which lenders deliver on their promises and which don't. Missed deadlines may squash your purchase.