5 tips for getting the right mortgage for you
Shopping for a home? Then you are likely shopping for a mortgage. But there’s no need to panic or even worry. I recently spoke to Chris Cope, President of Allen Tate Mortgage, and he gave me some tips to share on how you can make sure you get the right mortgage for your situation.
1) Start shopping by getting referrals. These referrals could be from a friend who had a good experience, or from professionals like your Realtor, your builder, or even from your attorney, accountant or financial adviser.
“I would always look for a relationship-based referral with an emphasis on trust, relatability and experience. You want someone who will be there with you, application to closing, and every step in between,” Chris advises. “Customer service could make a big difference on the road to closing, even if all offers are otherwise equal.”
Other key factors to look for are accountability and open communication. Is the loan officer accountable to others in the company, and thus motivated to keep the experience positive and the outcome desirable? Is the loan officer a good communicator, with an understanding of how to explain the details so that you will clearly understand?
When you are interviewing a loan officer, other important questions to ask right off the bat include:
- Are you available during non-business hours?
- How quickly can I expect to hear from you when you have news about my loan process?
- If there is “bad news” during the process are you willing let me know right away and to work with me to find a solution?
2) Research online reviews for an idea of how these lenders deal with customers and customer problems. Reviews can help you see if there are any patterns of predatory lending practices or poor customer service.
But don’t discount the value of a real-life conversation. Chris adds, “A face to face or phone interview really helps you find a loan officer who knows how to ask you the right questions to get you the best offer, and who can show you and explain why, for example, a certain option will or won’t work for your particular situation. That loan officer should ask you questions until your situation is fully understood.”
3) Once you have talked with some mortgage brokers, compare the offers you receive, starting with the Good Faith Estimate or worksheet each lender should present you. And if you really want to understand and compare them in an apples-to-apples kind of way, you won’t be looking at rate vs. rate, or even fees vs. fees. As with many things in life, it’s the bottom line that counts, so look at All Costs vs. All Costs. Now it’s your turn to go back and ask questions, and Chris encourages consumers to “ask until you understand.”
4) At this point after you’ve received your offers, you may be asking, “Is the bottom line really the bottom line. Can I negotiate?” Good question. Because if you don’t negotiate, you may never know. Chris Cope says it’s certainly worth asking a few more questions, with the best places to negotiate being interest rate, the effect of your down payment, and perhaps fees. Your rate, will, after all is said and done, depend on your credit score and loan-to-value. But what about rates in 2017? We’re all wondering what’s going to happen. Chris says nothing is for sure, of course. But if you can’t bring yourself to lock-in, in hopes of a better rate, ask yourself if you could absorb the difference if the rates increased before you locked-in. You might (or might not) sleep better knowing you got that day’s best rate even if it goes down a quarter point the next day. It all depends on you and your current situation.
If, while negotiating your loan, you decide to increase your down payment, by all means let your loan officer know! This could improve your loan picture and get you a better loan offer. Or, if your loan offer isn’t where you’d hoped, consider increasing your down payment to get it closer to what makes you more comfortable.
And even though Chris says it might not save you a bundle (but perhaps can pay for one of those 27 trips to the home improvement store you’re bound to make), you may have some wiggle room in a few of the fees you see on your offer, such as the appraisal fee, process fee, or underwriting fees. It never hurts to ask.
5) Don’t be afraid to set your standards high, when shopping for a loan. Your mortgage company should be as good as or better than any other lender out there, offering you expertise, knowledge, convenience and exemplary customer service. For example, when your credit report is pulled, you should be able to sit down and review it together. You also should expect to have your loan officer’s direct number, always to be kept in the loop about where you are in the loan approval process, and you should expect to be given options if things change during the deal.
Detailed and continuous communication is key to getting the best mortgage for your situation. After all, it could be a thirty-year relationship. Make sure you’re happy with it.