by Lew Sichelman (Special to Freddie Mac)
Virtually every lender today can estimate how much you can borrow and at what interest rate -- after they verify employment, bank accounts and other information*. The big differentiator among lenders today is timely, personalized service. Everybody wants that lender who will follow through on its promises, close the loan on time, and get you the best deal you can afford.
So how do you find that lender?
Start your search by asking your friends, family members or trusted realty professional for their recommendations. Then pick two or three candidates and interview them. Be thorough. You will have to live with your choice for a long time.
That’s why you should ask questions like you are the hiring manager for a Fortune 500 company. Here are just a few questions I think you should use when you ask for a recommendation or talk to a prospective lender.
- Can they explain the different kinds of loans and loan terms that are available in clear and understandable language? Did the customers who recommended the lender find their answers satisfying? When you talk with the lender, do you understand their explanations? (Remember: this is a major financial obligation we’re talking about so there are no dumb questions.)
- Will they give you a single point of contact to reach for help or support anytime during the process?
- Will the lender provide regular updates telling you where your application stands at any given time?
- Will they demand paper documents -- like two years’ worth of tax returns, or recent pay stubs – or will they accept them electronically once you sign the proper release forms?
- Will they take the time to let you know they received the information you sent? Will they tell you when it was received by the proper third party?
- Will they clearly disclose and explain the total cost of the mortgage you want? (Lenders are required by the Consumer Financial Protection Bureau (CFPB) to provide newly redesigned mortgage and closing disclosure forms that are intended to help consumers make informed mortgage choices.)
Finally, before making a decision, see if there are any consumer complaints involving the lenders that interest you. The way to do that is to check with your local Better Business Bureau and the Consumer Financial Protection Bureau a federal agency that maintains a database of gripes filed against lenders. It’s really no different than calling a past employer to check out a candidate before deciding whether or not to hire them.
Follow this series just in time for the spring homebuying season.
*How much you can actually borrow will depend on whether the appraisal supports the amount of the loan you want.
Lew Sichelman writes about housing and mortgages in plain English for consumers in The Housing Scene, a nationally syndicated column. Contact him at email@example.com
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