How To Choose A Mortgage Lender When You Buying A Home?

How To Choose A Mortgage Lender When You Buying A Home?

In this article, I want to tell about, how to choose a mortgage lender and that I'm going more specifically go over mortgage lender versus banks versus credit unions. Tell you the difference between those. Tell you the pros. Tell you the cons and then we're going to go over a little bit about what questions you need to ask the mortgage lender to make sure you get a really good mortgage lender for you.

How To Choose A Mortgage Lender When You Buying A Home?

Major Difference between A Credit Union Vs Bank?

Credit Unions

I'm not a big fan of the credit union. I think credit unions are great. They do car loans that you do checking savings CDs much like a bank. They have really good customer service. They really care about their members and I think that's great.

The problem is I don't really think the training there and I'm a person that really believes in knowledge. I'm not saying that if you work with a credit union or someone works with the credit union in or go through a credit union. Not saying this about all credit unions. I'm using this in a general sense. They just don't have the best training in the world. The other problem with credit unions is the people who are doing the loans.

The loan offices the credit union a lot of them are strict salary. If they're not strict salary, their salary plus bonuses and I'll get to this in a little bit later. That's why I'm not really a big fan. Years ago when I used to be in mortgage banking, I actually used to go to credit unions. They were some of my clients to get loans from because they didn't have all the knowledge and they were telling people they weren't qualified because they could not work with them. Now the good thing about credit unions because they are customer service oriented they would pick up the telephone and say hey we can't do this loan can you do it? At least they're going to do that.

Banks

They're not like that. This is one of the things with banks. Banks have a lot of good advantages. As a matter of fact, if you're going to be using bond money, you're probably, going to be using banks. If you need construction loans you're probably going to be using banks but banks like credit unions. They're a jack of all trades. They're not a master of one. They're doing the checking, they're doing savings, they're doing CDs, they're doing car loans, boat loans you name it. They're doing anything and everything.

When you tend to go to the loan officers and a lot of banks not all of them, again if you work with a bank don't get mad. But I know a lot of people that have worked for banks. What happens is, they get called the foot traffic. They're not going out there hitting the pavement every day. A lot of the loan officers where the banks are just sitting in the bank and just waiting for the business to come to them. They're not going out. It's sort of like I always look at our industry. Are you having the lion and you have the gazelle. There are a lot of lions with banks but most of them are gazelles. They're sitting back. Again banks pretty much most of the loan officers are on a salary plus a Bonus. They're not straight commission. That's one of the things.

When it comes to banks again there are their pros. When it comes to banks you have to understand that they're only one when lending their money. This could be a problem if you go in and maybe figure on an FHA loan and maybe that's not really very good in their wheelhouse. They might tell you “well you're not qualified for a loan”. They're not going to say you could probably get a loan but you just can't get one through us that's the problem because you're only using their money. If you're a square peg and they have around while you're going to have a hard time fitting in that and that's the unfortunate thing.

There's a lot of fallout. There’s a lot of people banks tend to want the cream of the crop buyers. If you're walking in with 750 credit scores, putting down 20% your salary and employee great, but what happens if you don't fit into that? You may be working with a bank. You may not know the thing about banks is they're generally, a little higher on the interest rates than say a mortgage lender. But they're a little bit what lower on closing costs. Because everybody's in-house and that's the nice thing about banks is their in-house. Now I will say this if you are going to use a bank.

Use A Credit Union Or Mortgage Broker Get Someone Local

If you’re going to use a credit union if you are going to use a mortgage broker get someone local. Don't go with Wells Fargo and go to some 800 number or you walk into Bank of America and they say oh let me give you this 800 number Des Moines Iowa and you're what I am in Tampa or somewhere else. You want someone local. Out of sight out of mind, you want someone, if things aren't going your way you could go in there and pound on their desk and say what the heck's going on. Just keep that in mind but them generally everybody's in a localized area. You'll have your underwriter there. You have your processor there.

They do have some programs that they have a little bit more flexibility on because they could just decide not to sell that but they might keep it in their portfolio but generally speaking the main thing I would probably rather choose and I'll get into mortgage brokers in just a little bit. Why I tend to like mortgage brokers better because a bank their loan officer is getting paid usually a salary plus a bonus. That’s the opposite.

Let’s Talk About Mortgage Brokers.

Mortgage brokers they're basically pretty much all of them out there. It's sink or swim. They don't get paid unless they find a way to say “yes”. If you walked in and I'm with the broker and you were on an FHA loan program I'm probably going to have one lender for that. That it's going to be really focused on FHA. If you're VA you're probably going over to this later. If you're on maybe a conventional in a fight for sit down you're over here. 

If it's a 20% down you're over here. If it's a jumbo it's this linker if you go in and maybe you have low credit scores you're over with this lender right here. They don't have just their money. They have everybody's money now. I know you go into these brokers and they're like, we have 50 lenders. Let’s face it most mortgage brokers will only use two or three. They'll probably have five to seven at any one time but they are very efficient.

Because this is all they do and they don't get paid and unless they find a way to say “yes”. That's why I sort of break it up. Is there are the lions and there are the gazelles and I would have rather have someone that is on a straight hundred percent commission. That if they don't find a way to say “yes”. They don't get paid. That's a huge motivator. There is the thing with a little bit different like the banks. Keep in mind the broker’s out.

They're going to broker out to a bank. They could even be broken out to the same bank you're getting the quote from. It's pretty rare but it could happen but they're going to have usually a little bit more costly. Because they're going to have the underwriter in-house and I mean in-house but they're going to charge for that. They're going to have the processor that there been a charge for that. They're going to have a little bit more cost. They get their pricing and wholesale pricing not retail like a bank. It’s usually going to equal out. There's and if you're looking at going with bond money, you pretty much never going to go with a broker.

Choosing the Right Loan Officer

If you're looking to get in a construction loan, you're probably not going to go with the broker. It's all about choosing the right loan officer and that's what you need to do. You need to choose the right person. You could look at it but let's go over what you really need to do when it comes to choosing a loan officer. You want to always start off with your real estate agent.

First, you could get a recommendation from your real estate agent. You could get a recommendation from friends, co-workers but dig a little deeper. Don't just get that recommendation. Ask enough to say,

Why you think this loan officer is so good?

Why are you referring me to this person?

What is it about them that makes them so good?

You can also go and take a look at sites like Yelp. Go to their LinkedIn page check their website. Read up on them but overall, loan officers are horrible at marketing. Don't hold that against them. You definitely want to dig a little deeper and ask him. When you're talking to them just like an interview in a real estate agent.

You Need To Ask Loan Officer Two Questions At Least.

Why should I work for you?

Why should I work for your company?

Let them tell you, why you should be working with them. If they don't have an answer to those questions, you really have to wonder. You definitely talk to your real estate agent. Just make sure, the loan officer knows what they're doing. I mean feel free to ask them what training you have. It's not as important as a realtor but what the loan officer it's everything. If you go into the better business bureau and they don't have a good rating. You really have to wonder if that someone, who you want to work with. Do these and you're going to be good to go. Definitely pick loan officer at the end of the day. Get someone you trust. 

Get someone that is knowledgeable. Who's been in the business that you feel has the proper training? How to get a really good interest rate is it's more about the loan program. If you're in the wrong loan program the interest rate doesn't matter and if you choose a loan officer that doesn't understand different loan programs and they put you in the wrong one program. You could have a great interest rate that one program but it may not be the greatest interest rate you could get or you need.

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