5 Key Traits of a Great Mortgage Lender
Millions of Americans buy a new home every year, and almost 75% of them will use a mortgage to fund the purchase. And millions more will refinance their current mortgage. Add all of those together and you have tens of millions of Americans who are looking for excellent mortgage financing.
As you are looking for a good mortgage, you want to have a good interest rate, but it also is really important to work with a good mortgage lender. He or she can help you to diagnose the best loan opportunities, find better rates, terms, and guide you to the program that makes the most sense for you. Below are some things to look for as you are trying out different lenders, and how that good lender can help you get the best mortgage for you.
1. Loan Officer that Asks Questions
A good mortgage lender will ask you important questions so that he can get you into the ideal loan program for your specific financial situation. Some of the questions a good lender will ask you right away are:
That lender will then take the answers to your questions and offer you good options for your situation. For example, if you had a foreclosure three years ago and have 650 credit and a limited down payment, the lender may advise you to get an FHA-backed mortgage. This is a US government-backed mortgage that encourages lenders to offer low interest mortgages to some borrowers. The down payment can be as low as 3.5%.
Or he may advise you that a 5% down conventional loan may make more sense in the long run. Or, if the interest rate on a five year adjustable mortgage is a great deal, and you plan to move in four years, he may recommend that. On the other hand, a bad lender will hustle you in the door with the lowest rate advertised, and will break it to you later that you do not qualify for that mortgage.
2. He Communicates
A really good lending professional knows the mortgage industry and all of his products well. He needs to be able to communicate the benefits of each to you in a way that you understand. You need a great communicator as your lender. You are buying the home, so you must understand every document that you are signing, and even the new mortgage disclosures that are pretty straightforward can still be a bit confusing for some people. A good lender will be able to explain everything you are signing.
A good lender will also be able to explain if you should get a 15 year mortgage, a 30 year mortgage or something else. Also, if you are refinancing, you will be able to advise you if getting a home equity line of credit or a home equity line is best for you.
A bad lender will use a lot of jargon to impress you and may not even understand all of the mortgage language he is throwing at you.
3. They Problem Solve
Good mortgage lenders are experienced and know they should expect the unexpected. They have many years of experience dealing with problems in the lending process. For example, sometimes the mortgage product you were counting on is cancelled, or the terms changed and you no longer qualify. Your lender should be able to get you into a good alternative.
If the underwriter wants to know why you have several credit inquiries on your report, your lender should be able to write a good letter of explanation. Getting the loan to close on time is very important and the good lender will work with you to make sure you get everything done on schedule. Not closing on time can cost you money.
4. He Works in Your Comfort Zone
By this we mean that a good lender understands that even if he can get you approved for a much higher loan that does not mean that he should. You may be able to afford that $500,000 mortgage on paper, but if the potential payment makes your heart skip a beat, the good lender will not put you into that situation. The lender will figure out another loan program for you or a smaller loan.
5. He Stays in Touch
All of us have our communication preferences, and a good lender will talk to you how you want – by text, email, phone etc. A good lender knows that getting a home loan is stressful and he will get in touch regularly to give you updates. A bad lender will be out chasing new clients and will not provide proper service to current clients.
What to Remember
A good mortgage lender is absolutely vital in the home purchase and refinance process. Make sure you look around and find a good one. Ask your friends and family for recommendations as well. -Article was written by James Swift
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