Loan Officer Selection: More confusing than the BCS?

All right the verdict is in and it is time to buy that first home. You have been waiting for this your entire life. You have pictured the home in so many ways. You have decorated the inside and decided on the yard decor. Whether it is you and your spouse or you alone or even if your parents are involved, it is such an exciting time. Whatever the team may be you begin to jump behind the computer and look at homes on line. You may even know a Real Estate agent or have a friend or relative that has referred one. You may have even taken a drive on the weekend to see the inside of that house that you have been eyeing and met the listing agent. Who Knows? One thing is for certain “It is time to buy a house!”

Buy me please!

Buy me please!

 

Fast Forward about two weeks or so and you have sat done with all those that will financially contribute to the home. You have discussed the affordable house payment if you will based on what you know that you take home. There are a few battles, maybe a budget , maybe not, you may have considered the increase in square footage also will increase the utilities or even may have thought about the down payment. You have also thought about how you would decorate and the schools that the kids would go to.  Restaurants have been taken into consideration and you get the point. What is missing from all the talk? How to get the MONEY!cash1

Choosing the right Loan Officer to help you finance the biggest purchase in your lifetime is the last thing that many homeowners think about. They think about the cost, the down payment, and look at homes that may be in the price range all before they find out who might help with this.

Disclaimer: This is not always the case but many times this is the truth as I have found it over the years so please do not get offended. If you do I am sorry in advance as this is not the intent!

After a client has viewed the homes on line or seen them in person the Real Estate agent that they have hired sits them down and says we really need to get you pre-approved. We will not be able to write an offer on a property that you may like until I have a letter of pre-approval from your lender. From here the conversation can go many ways:

1) Parent Referral- since my parents are going to co-sign they have suggested that we use the lender they have always used. This may or may not be ok. The parents may have used a bank, may have not needed FHA so their lender may not have this option, their lender and the kids may not click.

2) Friend of Family- We have a long time friend of the family that has always said to use them when it came to this point so we are going to call them. RUN! This is a recipe for disaster most of the time!

3) Realtor Referral – (my personal favorite because it is 70% of my new business.) The Realtor says I have a person that will be great for you and I would like you to talk to them. I will be the first to admit that I may not be the Loan Officer for everyone although I would like to be.

4) Referral from Someone you Trust- One of your closest friends has just had a wonderful experience or maybe they are a colleague but that is the way that you are going.

5) Referral from Retail Bank to Broker- (another large source of my business). Many banks do not do Government Loans so we get the run off as Brokers.

6) Found a lender on line (Yikes!) – many do some shopping on line and get a few quotes. This hardly ever works out.

I am certain that there are other ways that clients choose to find the person that they will use to deliver the money but these are a few that I run across often.

Why then is the selection process of one of the most important decisions seem so random? It seems to be done so nonchalantly or the opposite it is an interrogation of fees charged and based solely on the lowest cost. Two opposite extremes and why it seems to be like the BCS Confusing!

For those that do not follow college football the BCS stands for Bowl Championship Series. Through sophisticated algorithms teams are ranked based on wins, losses and the quality of their opponents. This ranking helps the selection committee choose who should play for the National Title. This is the pinnacle of College Football. This is the very highest achievement a college football team and school can attain. They play their hearts out all season and the decision is left to an algorithm.

Short Soap Box: I once had a potential client tell me that they had a list of ten candidates and that I made the top two on the spreadsheet only to be told that I was the first loser. The consolation prize. The reason was that in the end the other guy was $200 cheaper but they liked me a lot better. HMMMMMM!

Choosing the right Loan Officer can be a daunting task and one of the most important decisions that you will have to make. In 2009 and moving forward there should be some criteria to how you choose. If you are referred by someone you should ask some questions and even meet with the Loan Officer to determine your level of comfort. I tell each and every client when we get together that this is an opportunity for us to get to know each other and determine if we are a good fit to work together. Ask questions and let the Loan Officer answer them. This is what we are here for you. To help make the process as smooth and understandable as possible.

In conclusion, maybe the decision of a Loan Officer requires a little more thought. Do not let the committee determine who you are comfortable with. Many of the new homes will try to get you to use their lender. If you are not comfortable it is your right to negotiate. Hopefully this lender will be their for the rest of your home purchase career. The BCS is confusing and is always a let down. Don’t let your lender choice be this way. Take control. Get a referral from someone you trust as mentioned above and take the time to meet with this person. In the end it will pay big dividends for you. You may just win the National Championship or better yet get the perfect financing for the perfect new home.

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