So you want to buy a house, what is the first thing you do (after trolling for hours on MLS listings sites )? You contact a realtor. The realtor is very happy to take your call and advises you to get pre-approved. Conveniently they just happen to have someone that comes "highly recommended and specializes in (fill in the blank, whatever you need is there specialty)" . You will call this person (which you should do) and they will pre-approve you for your loan, and send you off to buy a home! We all love one stop shopping and you have hit the mother load. You found a great realtor and mortgage broker that is highly recommended. The fact that they are basically in bed together should make the process go even smoother, right? WRONG!
The realtor is recommending a broker because they have a reciprocal business relationship. Not because they are any better or worse than anyone else. You must protect your best interest and shop for your loan. Here is what you need to do when vetting your mortgage broker:
- Only work with a broker that is no more than one state away from you. There are plenty of times where local knowledge comes in handy. I have heard horror stories about national internet companies.
- Work with a broker that is upfront about rates and fees. On a purchase you are committing to a lender prior to having the ability to lock in an interest rate. As a result, they have no reason to give you the lowest rate when it is time to lock in. They have no competition at this point, why would they?
- Most importantly, work with someone that you trust. Trust your instincts. They are almost always right. Interview your lender; make sure that they have your best interest in mind and not just their own commission.
Now you have a realtor, a mortgage broker and a pre-approval. Now it is time write a contract. When you are writing the contract, your realtor will say "I work with ABC settlements, they are great" You will likely nod and move on. It's just a title company, right? WRONG! The difference in title companies could be several hundred dollars. Do not let your realtor tell you who you are doing business with. Start comparing title companies online and use the settlement service that you want to use!
Bottom line: This is your biggest transaction of your life. Do not let someone else make the decisions for you; especially not a realtor who knows very little about the mortgage process. While you're at it, do not ask me how much you should list your home for. I have no clue and I have no problem admitting it. I can refer to a realtor that specializes in your area though. :)
Contact Josh Burley today to get preapproved for your home purchase.
Work with a LOCAL mortgage lender that you can trust. Choice Finance has been serving the DC Metro area since 1996
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