Sunday, January 12, 2014

How to find a better mortgage originator?

The mortgage lending business is hyper-competitive and mortgage originators come in all forms of affiliation. So, how is a consumer supposed to choose a mortgage lender? What should one follow before making the decision?

Start by asking someone close in your circle that has recently gotten a mortgage, see if he can recommend a lender. Ask a financial adviser, an accountant or your attorney to help you with a short list of lender referrals.
Search the internet and thoroughly investigate offerings for details. Advertising is shiny, so squint through the glare and find out about fees, lock-in periods, points and qualification requirements for what is being featured.

Remember that the port of entry with every lender you consider is a salesperson, everyone you talk to will sound like the best deal. Take notes, ask for things like Good Faith Estimates (GFE) and Truth-In-Lending (TIL) statements to be e-mailed or faxed to you. The mortgage lending industry is electronic, everything is available to you in writing instantly.

The primary goal of a mortgage originator is to convince you to apply for your mortgage with them. Financial acumen is helpful but not required; the best salespeople are the biggest producers in the mortgage industry.

Mortgage originators are fond of titles, so choosing a lender based on how remarkable the rep’s title is may be perilous. Even so, titles may not be the best starting point when selecting a mortgage originator, remember, even the Great and Powerful Wizard of Oz is really just a guy behind a curtain. Beware the fancy title!
Nowadays, just about every real estate office has an “in-house” lender with an originator right there in the office. You may consider in this regard as well. In-house reps exist because there is a mutually beneficial financial relationship, the lender has unrestricted access to agents and buyers, and the real estate company is compensated by the lender.

Online financing is popular with tech savvy consumers and can be a convenient alternative to traditional lending sources. Significant interest rate discounts offered by online financing sources are advertisements.
But just like the big banks, the in-house lenders and the World Wide Web reps, “expertise and wherewithal vary along a greatly disparate continuum.”

At the end of the day, your mortgage loan will be processed and approved by people, software and institutions. Beware the man behind the curtain, but if trust in your lender’s rep is the result of your vetting process, chances are you have chosen well.

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