Do you ever stop and think about why we choose the products and services we use on a daily basis? More than likely it’s because our parents used it, a colleague recommended it, or a friend suggested it, and depending on what the item is, or product you are looking to purchase, we google it, and now a days we #askfacebook. It’s natural right, we all do it.
And when we do this we have plenty of folks chiming in with suggestions, ideas, tagging people, the number of comments is mind blowing. Again, it’s natural, and we all do it.
This is great for things like, what toothpaste do you recommend? if you don’t like it, you buy some more, it only 2-$3 max. Where is the best place to go to get your car detailed? Again not a biggie, your car is bound to get dirty again and if you didn’t like their services, you can #askfacebook again. But we may want to do more in depth research when it comes to today’s topic. I’ll explain more…
How many of you fear speaking with a lender? Your knees get weak, palms get sweaty?
Why is that… It is the fear of the unknown, which leads to feeling unprepared, or is it a fear of rejection? All of these are natural.
Here are a couple things to help you be prepared for the conversation and help you select the right lender for you.
First- get your credit score in shape- the higher your credit score, the better your bargaining power you’ll have. Get a copy of your credit reports from Equifax, Experian, and Transunion. Make sure they are accurate and free of errors. Each is required to provide you with a free credit report every 12 months.
Try paying off as much debt as you can. By lowering your debt, you’ll improve your debt to income ratio. Plus paying these debts off will free up money for your down payment.
Once you successfully reached this point you should be more comfortable having a conversation with a lender. But how do you select one you ask?
I suggest asking your Realtor. Don’t have a realtor? Ask your accountant. Don’t have an accountant? Ask your financial advisor. Don’t have a financial advisor? Ask at least 3 people that you know like and trust that recently went through the process and see if they recommend their lender. If so, great! You are now ready to make the call.
When it comes to finding the right lender, please know it is not a one size fits all. Also the mortgage lending business is hyper- competitive and mortgage originators come in all forms of education, training, experience and affiliation. A perspective client will call and I always ask the question, have you spoken to a lender? Most will say no they have not. And for the ones that say they do, they tell they have spoken to Chase, Bank of America, Rocket Mortgage, Quicken, and Wells Fargo. May I suggest to not focus on the company, however it’s more important to focus on the loan originator. Look behind the curtain.
Let me tell you a little secret, ready? Mortgage people are salespeople. The primary goal of a mortgage originator/loan officer is to convince you to apply for your mortgage with them. There is nothing wrong with it, may the best salesperson win!
Please understand when you purchase a home, your’re in it for the long haul. You’ll have mortgage payments for 15, 20, 30 years so it is smart to shop around to find the best mortgage lender out there.
Finding a mortgage lender involves more than just getting a good interest rate; you really do want to work with the best mortgage companies, staffed by professionals who will guide you through the process.
A good lender’s objective is to make the transaction a smooth a possible.
A good lender will talk to you about your credit score and help you improve it if necessary in order to get you the best interest rate you possibly can get.
A good lender will qualify you for a mortgage and if unable to at the time they will show you the steps to get you qualified.
A good lender will shop around on your behalf for the best program for you. And will let you know of special grants that you may qualify for.
Things to ask:
What are the down payment requirements?
What types of loans do you specialize in?
How much can I expect to pay in closing costs?
How long will it take to get a mortgage pre-approval?
How quickly can you close the loan?
So to summarize- Prepare upfront before speaking to a lender to reduce your level of anxiety, Not all lenders are created equal, don’t focus on the size of the bank/mortgage company, focus on the individual who will be handling your loan. Work with the person that you are most comfortable.