By now everyone has heard of the subprime fallout and the effect it's having on our economy. In a nutshell, some lenders made loans to people without requiring a down payment or even verification of income, and once interest rates went up, some owners have found it easier to walk away than to try to keep up their payments. Which is why I'm writing this month about the importance of choosing a reputable lender when shopping for a mortgage...

How important is a reputable lender? Well, considering that for most people their home purchase is the largest transaction they'll have in their lifetime, it's very important. Your most valuable financial asset must be in the hands of someone you completely trust, can make the difference between a smooth transaction and a difficult one, and, of course, can save you thousands of dollars in the end.

Also keep in mind, because of the high default rate, sellers and their real estate agents have become increasingly skeptical of pre-approval letters from mortgage brokers they don't recognize. A pre-approval letter from a known, reputable lender will put you in a stronger bargaining position, particularly if you find yourself in a multiple offer situation with other buyers.

So, where do you start? First, start by asking around - nothing beats first-hand information! Friends, relatives, neighbors, anyone who has recently bought a home will tell you if their lender was good or not. And, of course, your realtor, who deals with mortgage brokers and banks every day, knows who the reputable, trustworthy lenders are - after all, who more than your realtor is going to want you to get the best, most efficient lender around?

Once you have a list, you should start calling and asking for quotes. Be sure to compare apples to apples with these quotes. The rate is not the entire story, closing costs can make a big difference in your final costs. Try to make the calls within the same few days and to ask the same questions (for comparison purposes) so you can be sure that there are no big changes in the home mortgage market.

Just a quick note about online lenders: You probably see many ads on television and the Internet about low mortgage rates, and you may want to go online and see if there are more competitive rates there. Remember that with online lenders sometimes the rates published are often for loans which have very tightly defined criteria that few borrowers meet. Online lenders generally cannot provide the knowledge and feedback that might help you make the best choice among the wide range of mortgage options. Like having a local real estate agent, it's usually best to have a local lender who is more familiar with the market.

Ask yourself these questions. Is your prospective lender available when you give him a call? Does he get back to you promptly? Is he accommodating when responding to your inquiries? Does he seem to understand his business? Is he well-versed with the refinance home mortgage industry?

If the answer to these questions is yes, you can bet you've found a lender you can trust. Finally, just listen to your own instinct when it comes to choosing a lender. If you feel uncomfortable for any reason, it's best to continue looking for someone else.

I will certainly be happy to help you find the right person for the job - Happy March!

Charlene

P.S. Don't forget to use the calculators on the Gold Key website to start your search - figure out how much you can afford before talking to a lender!