Mortgage Jargon, Explained
Ever wonder what some of those fancy, complicated, OWIA (Often Written In Acronym) statements mean? Well, I'm glad you're here on this page, because here we're going to debunk 5 common mortgage phrases that you may see if you're working with a loan officer or company that's not the JM Loans team at Mason Mac, and what those phrases really mean to the people who aren't in the mortgage trenches each and every day.
Jargony phrase #1 - "we have no closing costs!"
What it really means - "we have high interest rates!"
Huh? Yep. There is no free lunch in finance (unless you're at a vendor conference!). Underwriters, processors, and office staff need to be paid. Software needs to be paid for, along with compliance costs. Profits at a mortgage company to pay for those things come from 2 places - your rate, and your closing costs. So if there's no closing costs, you do the math....
The JM Loans Take: The no closing cost option (yes, the higher rate option) is actually the best option for people, but only in certain circumstances. We DON'T believe it should be a marketing gimmick though. We'll never advertise 'NO CLOSING COSTS' as if you're getting a free lunch. We'll give you options, make recommendations, and allow you to make a decision.
Jargony phrase #2 - "the underwriter did it!"
What it really means - "I, sir or madame, your trusted loan officer, screwed up, but thankfully for me, I have a scapegoat you're not allowed to talk to!"
Huh? Indeed, your loan officer screwed up. Rather than swallow their pride, they blame the (sometimes, but more often than not) underwriter that the borrower has no contact with. The reality is, a loan should rarely be declined after going to underwriting for anything other than property-related issues if the loan officer properly did their job.
The JM Loans Take: With the JM Loans team, we don't make mistakes. Just kidding. We're not perfect (but we have a LOT of experience....aka that wisdom you learn from mistakes, or as I like to call them, "learning experiences" over a long period of time), but we're really, really good at what we do and we take pride in always working to get better. If there ever is a screw up, mistake, or something that goes wrong along the way, myself and my team are required to own it, inform everyone involved, and work to move forward and make it right.
Jargony phrase #3 - "they're lying to you!"
What it really means - "crap, we can't beat that rate" OR "uh-oh, we don't have that procuct"
Huh? Unfortunately, some sales people can't accept the fact that they are not, in fact, the best fit for everyone. Sometimes, a program we can't offer is the best option. Sometimes, another company will have a lower rate. When a sales person is too inexperienced or unskilled to show value to a borrower, they often resort to competition bashing. While we're in banking and some competition deserves a good bashing, more often than not it's unwarranted.
The JM Loans Take: We know we offer a lot of products, competitive rates, and one of the best loan processes in the industry. That's why we make our home at Mason Mac. That said, sometimes we get beat. When it happens, we investigate (especially when it's a "too good to be true" offer, like we often see when a competitor accidentally quotes someone a primary-residence rate when it's going to really be a loan for an investment property), request documentation, and will always take that documentation to our executive-level management (CEO, EVP capital markets, and COO) to see if we can match or beat the other offer to earn the business. We win some, we lose some. But the reality is, we win most, but we're not afraid to tell someone to go get a better deal if there really is one out there.
Jargony phrase #4 - "......."
What it really means - "we screwed up and I have no idea how to tell anyone"
Huh? This is often a sign of inexperience. Someone that doesn't yet have battle scars from the real estate industry and is still in that naive part of a career when they think everything in real estate always goes exactly as expected. Since they haven't experienced the wars that can occur between agents, buyers & sellers, appraisers, etc, they don't know what to do when something goes wrong, so they resort to doing nothing. Including not answering the phone, not returning calls, not responding to emails, and generally ghosting everyone in the transaction.
The JM Loans Take: We've been doing this long enough to have seen just about everything. We've also learned it's better to keep everyone (and ALWAYS the real estate agent) informed when there's a potential problem or something seems to be going wrong. It's easier to have more help from more people than to block out the world and go it alone. We're not interested in being super heroes. We don't want all the spotlight, and we have no interest in being the problem solver that saves the day! In fact, we'd rather just work to mitigate problems as much as we can up front, and let the spotlight go to happy clients and their awesome agent.
Jargony phrase #5 - "We do everything!"
What it really means - "We hope you don't realize we're lying!"
Huh? Nobody in this business does everything, or at least, not very well. The more hats people tend to wear, the less they specialize on things like attention to detail and customer service. They're usually the "everything to everyone" type rather than the "best to my clients" type. The person who wants you to work with them because they're a Realtor, a Loan Officer, an Insurance person, a contractor, a credit repair specialist, and a babysitter for your kids is probably not very good at any of the above. In the lending world, any lender "specializing" in more than a few products is probably not doing a special job with any of them.
The JM Loans Take: We'd rather sacrifice a paycheck than put you in bad hands (including our own!). Do we have commercial lending options? We do! But do I think they're the best available? I'm honestly not sure, and busy enough with residential loans to not have interest nor time to focus on learning the commercial side, so we just don't do them. Do we have hard money options? I have people pitching me to be our hard money resource every week. But my personal take is that hard money, while necessary, is a slimy sector of the industry, and I don't have time to weed out the good guys from the bad, nor will I allow my clients to be guinea pigs to find out who's running a legitimate business and who's not. I'm not your commercial lender. I'm not your hard money guy. I'm OK with that.
In the mortgage industry, there's a lot of fluff, and sometimes it's hard to determine who's a good lender and who's just a good marketer. Sadly, there are only a few that are both! The JM Loans team sucks at marketing, but we're really, really good at residential mortgage loans in the 12 states we're licensed. We take our client's trust seriously, but also work to make the loan process easy and educate our buyers as best we can. Are we perfect? Nope! But we're working on it! And we'll never, ever hide behind fluff and jargon. We get by with expertise and good old fashioned hard work. We know if we do a great job, our clients will do the marketing for us!