You would not consult a stripper if you had the flu, do not consult a realtor about your mortgage

By
Mortgage and Lending with Choice Finance Corporation

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:

  1. 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.
  2. 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?
  3. 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

USDA, FHA , VA, Conventional and Jumbo mortgage rates

Josh Burley
Maryland Loan Officer


301.881.8900

Comments (4)

Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

Josh, This is so true.  I often say that I dont know how to stage or show a home, thats your job, I know how to get loans approved, thats my job!  even worse in our biz - Everyone is an expert when some one is buying a home, they will take their hair dressers word over ours.  I guess our experience isnt that important?

Dec 03, 2009 02:06 AM
Mark Hall
Realty One Group Cascadia - Vancouver, WA
Homes for Sale Vancouver Washington

Wow, that is a pretty broad brush that you are painting realtors with. While I completely agree with your 3 tips, I don't think that most realtors only recommend lenders under some reciprocal agreement. In this market, the most important issue is recommending a lender who can get the job done. Lucky for me, the lender who I recommend also has the best rates and the lowest costs in the area. A good indicator of his integrity is the huge number of referals that he gets from my past clients.

Dec 03, 2009 02:11 AM
BJ Matson
The Choice Group - Olney, MD

my sentiments exactly!

Dec 03, 2009 02:15 AM
Anonymous
Brent Mendelson

Josh,

 

Great post, it's a little broad but I agree with 98% of it. I have heard from clients my realtor said x or why. Then go get them to have your loan approved. The rules have changed so fast it's hard for us to keep up sometimes and we do this basically 24-7. Please know realtors that you shouldn't be quoting mortgage rates and especially what can and can't be done. I know you are looking out for your clients but you do more harm than good. It drives me nuts when again clients say me realtor said the prevailing rate is x%. Did they know that you only have 690 credit and a DTI of 55%?

It makes a HUGE difference if you are the above or you have 790 socre and a DTI OF 30.

We don't field the real estate questions why do you answer our questions? Remember too that you have to be licensed in every state as a loan officer and it could wind up getting you into trouble if you are out there talking about mortgages. Call us with questions BEFORE you talk to the client.

 

Thanks,

Dec 04, 2009 05:20 AM
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