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Choosing YOUR Lender…THE MOST CRITICAL PART OF THE DEAL

Unless you are one of the rare folks that can pay cash for your home…you will need to get a loan.

Since the “lending debacle” of the years of about  2004-2006…lending has become a whole different world. The days of “stated income” and “no-documentation” loans are LONG GONE. The pendulum has swung WAY the other way. It’s not easy to get financing. Let me re-phrase that…there are some things you have to do. Prove your income. Prove your assets. Prove you have the downpayment. Have decent credit.

This is the form we will need to present to the seller when making our offer. The more complete this is…the better chance we have of getting our offer accepted. Especially if there are multiple offers the seller is considering.

It is what it is. If you want to buy a home…at a great price…and with the current GREAT rates…JUST COMPLY.

BUT…what  you DO have control of is WHO you choose to give your business to. If you think rates are the deciding factor…think again. Rates vary not only daily…but even hourly. So when you go to apply for a loan and are quoted a rate…that rate is typically not even relevant. In 99% of the cases…the rate is locked AFTER you have an accepted contract. It’s that day (and time) that you can choose to “lock” your rate. It is likley the rate you were quoted upon your first contact with that lender is NOT the rate you will end up with.

So, let’s say you found a lender…maybe online…or wherever…and they quote a really good rate. OK….but here are the possible outcomes of choosing a BAD lender:

  • They SAY they can do the deal…but really are not able to do it in the end. YES…it happens more often than you might think. WHY would they do this? I sure as heck do not know…I guess they just throw mud against the wall and see what sticks. They typically have a high rate of deals do what we call “fall out” (meaning fall out of escrow)…as they don’t do the RIGHT thing and counsel the client to get themselves to a place that they CAN qualify.  A GOOD lender…will tell you the truth. If you need to gather funds or clean up some boo-boo’s on your credit they will help guide you to do that. And get you ready for making a STRONG offer when you have all of your ducks in a row.
  • They string you along saying “no problem”…until the last minute. The sellers have made plans…YOU have made plans…you have spent money on inspections and  the appraisal…and in the end you loan is denied.
  • They DELAY the closing past the agreed upon closing date. This puts you in breech of the purchase contract and at risk of losing your earnest money. AND..if you are purchasing a bank owned property…it can cost you a lot of money. Usually the bank addendum has a penalty charge of around $100 per day if you do not close on time.  Five days…$500.
  • They have HUGE “junk” fee charges. All lenders have fees that are associated with getting a loan. But let me tell you…they can VARY A LOT. Make sure you know what you will be expected to pay in fees when you decide which lender you are trusting to help with your financing.

ASK YOUR AGENT for a referral on which lender to use. I have a few lenders that I would trust 100% to tell my clients the truth about their particular situation. They will give clients the best possible options and the pros and cons of different loan programs. FHA? Conventional? VA? How much should you put down? Can I borrow my downpayment? Who can pay for what a far as closing costs? These are all questions a GREAT lender should be able to answer for you.

And I have some very trusted, longtime business partners I can put you in touch with. I promise, they will have YOUR best interest in mind…not their commission. And if they say they can do the deal…they can DO IT!

Next…Making the offer…what to know