The more mortgage lenders entering the market, the more potential for dishonesty to just close a deal. There are many websites that advertise, “make lenders compete for your business,” but the only problem with this is many of the lenders do not look properly at your information and send an email giving the basic quote, not a specific quote for your needs. The lenders that do send a specific quote and give you a monthly payment, after speaking to them over the phone and getting the rates and monthly payment, the quote is no where near the original. How can you find a mortgage lender who is truthful and honest?
Not all websites are bad to use when looking for a mortgage lender, just be aware that some do not mention certain fees, prepayment penalties, or may not add your taxes into their monthly estimated payment.
Before shopping around for a mortgage lender, make a list of the certain terms and personal concerns to ask any lender to choose the honest from the dishonest. Begin the list with the amount of mortgage you are inquiring about, ask about the interest rates, PMI, second mortgages, penalty fees, closing cost, application fee, appraisal fee, flexible closing, lock in rate, and fixed or variable rates. From this point, you should have enough information to decide which lender you feel most comfortable with.
For instance, Fred bought his home for $265,000 four years ago and used a lender he was referred to by the realtor who sold him his property. The entire process was smooth and when a problem did occur, the mortgage loan officer called the corporate headquarters and solved the problem in less than a day. Any question Fred asked, the lender answered and even took the time to explain about the different mortgage programs they offered and all the different interest rates. They met in person a few times, double checked the paperwork together, each category was explained, and Fred never felt rushed and always knew what the up front costs were and had enough time to decide to pay them or average them into the mortgage. Fred refinanced his mortgage and used the same lender and loan officer and now refers them to his friends and family.
Donna bought her home for $265,000 four years ago as well and the same realtor recommended the same mortgage lender to her but she decided she would go research the internet before deciding. Donna put all her info into a mortgage lender website and within four days had five lenders who gave her quotes. Some of the banks she never heard of and none of them had a local person she could meet with. Donna decided to go with one of the bank lenders she found and began the mortgage application.
She assumed she was locked into the rate of 5% because she did fill out the application and paid the fee, three weeks go by and she received the official paperwork to sign and return. On the paperwork she notices many mistakes, her social security number was wrong; she was told there would be one first mortgage at 5%. Now the paperwork was showing a first mortgage for $240,000 at 5.5% fixed and a second for $25,000 at 6.25% variable. Donna got on the phone with the mortgage lender and told them the mistakes and said she thought her mortgage was just a first and locked in at 5% fixed, besides her social security number must be wrong! Due to the incorrect social security number, the mortgage structure changed because the lender was running it off someone else’s credit history which led to two payments for Donna. The aggravation was not worth the time spent correcting her paperwork and requested her application fee be refunded. After, Donna called the realtor and asked for the recommended mortgage lender. Now Donna, like Fred, continues to use the same mortgage lender and refers her friends and family as well.
The best way to find a mortgage lender who is honest, truthful, and patient is by asking friends, family, and sometimes realtors. The most reliable answers you will get is from people who have used a mortgage lenders services. Buying or refinancing a home can be stressful and confusing, why add to this stress with a lender who is not professional? There are many large, corporate banks and smaller, independent banks; whichever you decide to use, ask for referrals and recommendations before attempting to go through the Donna ordeal.