How to shop for a mortgage

Well this should be my last post for 2009. It's been alot of fun writing this blog and I plan on doing more of it in 2010. I wanted to take a few minutes and give some insight into how to shop for a mortgage in 2010. Many rules are changing starting in Jan and you need to know about them. A new GFE is being used and it's very confusing at least at this point. Here's what I think you need to know.

First off, I recommend shopping local. States and counties have little rules and quirks that a national lender may not know and understand. I have done loans in other states in the past such as CA, KS, KY and NE. I also did loans in NC, SC, GA and Florida. All the loans closed and because of the amount of time that I spent making sure everything went smoothly they did just that. Many loan officers don't take that extra time to make the loan as perfect as can be though. My comfort level was where I did the most business and still is.Maryland, Virgina, DC, Delaware and Florida are what I know best and that's the best place for me. So shop local to start.

The Internet is a great place for information but there are so many silly loan quotes posted these days it's very frustrating when you are actually quoting a rate backed up by facts. To quote a rate you need to know, credit, income, assets, what type of home, how much equity and if there is a 2nd mortgage. I get the "but I found a better deal" or my neighbor got x rate" No two loans are the same which is both good and bad. So I ask them if the other loan officer got all the above information and the client says no. Just remember that, there is a reason I ask so many questions, it's to give you accurate rates and know whether the loan can be done at all. It's MUCH harder to get a loan these days and takes much longer than ever before. There is little to no common sense underwriting left these days and everyone is running scared, especially the banks. My co-worker Alex Echeandia wrote about this topic also.

Bottom line, talk to a few local lenders, both banks and brokers and see how the compare on rate. Remember that YSP drives rates so if you want to see how much the loan officer is making DO NOT go to a bank. You will never know how much the bank is making on your loan and if you are getting a fair deal. Shop the rates but remember to check the total fees. I had a client recently that said to lock him at 5.25% with no points. I did and then he wouldn't close with me. He said he found a better deal. He got 5.0% with one point. He didn't get a better deal, he got a different deal. I could have done the same deal at 4.875% He cost him self thousands of dollars over the life of the loan by not talking to me again. Do some homework on the company and the individual loan officer. Google their name and see if any complaints or kudos come up thru the search.

I'll say this, if you shop rates and lenders, feel comfortable and start working with one person you do owe them the benefit of the doubt. If you find a better deal, tell them, just don't go off in another direction. We spend weeks and months sometimes working on a loan and deserve to know when you are in shopping mode and when you are committed. Shop all you like but make a decision and stick with it unless suddenly the answers start to change. Loans take 45 days to close on average but dishonest loan officers will still quote a lock good for only 15 days. Or they will be floating the rate hoping that what you want becomes available before you close. If the loan officer says you are locked then ask for a copy of the rate sheet which shows how long you have to close and the rate.

Most important note- LISTEN TO YOUR LOAN OFFICER. If I tell you I need something ASAP it's not for fun, I really need it. When we send you a package to sign with income and assets, don't take a week to get it back and pay attention to the instructions. We know what banks require and how silly much of what they want truly is. It's their money though and they are entitled to set the rules. If I say all pages of the bank statement, send them all in. If I ask for two most recent paystubs don't send the ones from 6 months ago. Tell us the problems, we know how to fix them and save you time. Remember the loan officer will save you more or cost you more than anyone else in your life. If you don't follow the rules, you lock will expire and you could end up losing the low rate you locked. Some banks will cancel your lock if you don't have the package back to them in 10 days. That doesn't mean send it to me on the 10th day, I need time to get it ready and ship it out.

I hope this helps and clears up some of the mystery of how to get the best deal possible out there. If I can in anyway help with the purchase or refinance to save you money please contact me right away. I will owrk very hard and always give you honest advice and do the best job I possibly can. Before I was a loan officer I was taken advantage in my first mortgage. It's why I became a loan officer and why I have remained one. I don't want you to feel like I did at settlement and not have any surprises. It's also why I go to as many local closings as I possibly can.

Happy New Year and good luck in 2010.

Thanks,
Brent Mendelson
Senior Loan Officer