Don’t Help Lenders Charge U More!
The first step should be select a Buyer’s Agent who can offer you the names of several lenders that you may want to connect with. However keep in mind that you are under no obligation to work with any mortgage lender who gives you a pre-approval letter. You can have a pre-approval from one lender & use a different lender for the mortgage. Also keep in mind that each time a lender checks your credit scores that your score may be negatively impacted a small amount. So, it can be VERY helpful to avoid needless credit checks by lenders that you may not want to work with! That’s where the 10 questions come into play because the answers to these questions will tell you who you may want to avoid as a lender and why.
Mr/Ms. Mortgage Lender will You Answer These 10 Questions:
Answer – This is fairly obvious. Your Credit Score get’s dinged with every Mortgage Lender that checks your Credit. Working with a lender that will share the credit reports and and scores with you means that you can eliminate all but the final credit check by a lender.
Answer – If they say NO to Question 1 AND Question 2 then I personally would suggest you stop talking with them and there is no need to ask the remaining questions.
If they say No to question 1 but yes to question 2 than if you like the rest of the answers below you may want to consider having them (vs. another lender initially) pull your credit.. Although my gut is when all is said and done that you will end up working with another lender which means yet another credit check that means the first one was not needed.
Answer – If they say they need to ship the documents then I would personally not work with them since this can cause a delay in your approval and is much more impersonal. This disconnected approach also means the loan officer, you are working with, probably has less clout to get the underwriters to work with special or unique issues related to your credit, the loan or that property.
Answer – If they do not support electronic copies and/or delivery I would not work with them. I think this says a lot about their mind set, the number of mortgages they complete and their commitment to be easy to work with.
Answer – If they say no and they are working with a 100% disconnected Appraisal Management firm I would not work with them since there is no way to know if the Appraiser will be familiar with the area the property is located in vs. another city or county nor is there a way to know if the appraiser that comes out does a lot with that type of property… like single family residences or one of the many different types of condominium homes etc.
Answer – If they say no I would not work with them. There are too many times when a place surfaces after business hours where you want to move on it and special issues, questions or needs arise. Not being able to talk with your lender could mean the difference between getting the perfect house or losing the perfect place to another buyer while you are waiting to hear back.
Answer – If they say no I would not work with them. There are too many times when a place surfaces after business hours and you want to “move on it” and it’s not in your best interest to reveal in a pre-approval letter that you indicates can spend more than your offer. Waiting on your lender to generate a new pre-approval letter for that particular property or that offer amount could mean the difference between getting the perfect house or losing the perfect place to another buyer while you are waiting on the lender.
Answer – If they say no I would not work with them. This happens on occasion that something surfaces and a lender will not be able to get you the mortgage. Starting over at ground zero with a new lender could mean the difference in you getting the home you want since you have a limited amount of time to close and after that point in time the seller can decide to terminate the purchase agreement. You might think a seller would continue but often times there could be back up offers, they could be concerned about your ability to obtain financing and/or they might have other reasons that they change their mind.
Answer – This is pretty much self explanatory but the goal is to make sure that your rate will never be higher than what they quote you when you make loan application and that it will automatically decrease if interest rates decrease.
Answer – If part of your decision is based on the notion that you will be working with the same lender or loan officer, after you close, than you should know how probable that is to occur.
Feel free to get the 10 Questions to Ask Lender Before They Have Access To Your Credit that you can attach in an email and forward to any lenders you are considering and ask them to reply in detail to each question and to include clarification where appropriate.