“Shopping for a Mortgage Professional is much like shopping for a medical doctor or an attorney. Choosing your medical or legal care based on “who is the cheapest” may not really be the best strategy. You want you choose a professional who is trained, certified, experienced and has a good reputation.”
Often times, this is my response to those asking for me to give them a detailed list of all their closing costs if they select me and my company to provide the financing for their upcoming home purchase or refinance of their current home.
I have heard of real estate industry partners telling their customers that choosing a mortgage professional is as simple as getting a “Good Faith Estimate” and comparing the costs contained on those documents. This sets up the borrower to work with the “best liar”, too early in the 30-60 day process of finding a home, rather than getting the most professional financing help to get the deal closed correctly.
How can this be? Aren’t all “Good Faith Estimates” accurate? Aren’t all mortgage professionals the same? Aren’t all mortgage companies the same?
The truth is: the numbers on the “Good Faith Estimate” given too early in the process are RARELY CORRECT! You see, the numbers on that document are affected by one or more of the following 13 variables below:
-> Sales price
-> Appraised value
-> Loan amount
-> Borrower’s employment status and history
-> Credit scores and payment history
-> Amount and source of down-payment
-> Date of closing
-> Immigration or citizenship status of the borrower
-> The housing type and location (Single family dwelling, Duplex, Condo, Townhouse, PUD, suburban, rural, urban, etc.)
-> The county where the home is located
-> Mortgage Interest Rate
-> The Term (length) of the Loan
-> The Title Company being used to close the loan
I have worked for several mortgage companies during my mortgage career and even owned my own company for 5 years. I know that some “loan guys” will “low-ball” the initial estimate, only to pull out the “surprise” at the closing table when your options for making any changes are very limited. Of the 21 separate line-item fees on the “Good Faith Estimate” I give to my borrowers when they sign their loan application forms and disclosures, only one of those fees is the same for every loan and is not dependent on any of the variables listed above.
Mortgage interest rates change daily (sometime, even more often!). I could simply print off a “Good Faith Estimate” with made up numbers as some customers request (as other “loan guys” may do) but it will not be accurate because of all of these variables I have mentioned. That process of collecting “Good Faith Estimates” prior to having all of the above variables identified will very time-consuming and wasted effort by the borrower and “loan guys” passing out worthless forms with inaccurate numbers.
My goal is to take the worry and uncertainty out of the process of originating, processing, underwriting and closing the loan. I help guide my borrowers through their negotiations with their seller by providing honest numbers as they become available rather than simply making up numbers to get “my hook set”.
I have been in the business for over 11 years and nearly 100% of my business comes from referral and repeat business. A businessman can not build that kind of business by being a con-man, cheating others or participating in the bait-and-switch tactics that have riddled this industry for years.
This helps my my borrowers understand how I have built my business and how I provide a level of confidence and professionalism which will make my borrower’s Real Estate purchase a very smooth and cost effective transaction over the next.
So, you ask, how should I select the Mortgage Professional to close my loan for me? I’m glad you asked. Allow me to give you a few guidelines for starters:
1. Choose a Mortgage Professional who is EXPERIENCED. Was he selling shoes or washing cars last week and then some buddy of his talked him into “trying out the mortgage business”? Does he really know what he’s doing? Has he been originating mortgage for 5-10 years? Does he do this full-time or this just a hobby or part-time gig?
2. Choose a Mortgage Professional who is CERTIFIED. Has proven to anyone that he knows the laws, the process, the programs and theory and mechanics behind the mortgage industry. Has he taken courses and exams to measure his competency? Is his certification a national designation? Is his certification from a professional association who can objectively measure and monitor his expertise or from some mail-order outfit looking to make few bucks?
3. Choose a Mortgage Professional with a GOOD REPUTATION. Is your selection a true professional who is respected and well-known in his industry. Who knows him and what kind of work he does? Who has ever closed a loan with him? Who can speak for his level of trustworthiness, honesty and attention to detail? What do you know of his character and personality?
4. Choose a Mortgage Professional who is a PROFESSIONAL. Does your choice know the market, the industry, the community, the history, the trends and your desires? Is he a member of his professional association? Has he been awarded and recognized by his peers and fellow business associates for his contribution to the industry and community?
During the month that your loan is supposed to close it is the most important transaction in your Mortgage Professional’s office. “Getting it cheap” doesn’t mean much when your “loan guy” drops the ball and makes a mess of the whole deal simply because he has “never seen anything like this before.” That stack of bogus “Good Faith Estimates” collected 30-60 days prior to your closing will mean very little when you find out that returning phone calls, diligently following up on underwriting conditions, and working long hours to insure that all of the bases are covered on your deal are not his priority or part of his work ethic.
Paper is cheap, and ink toner to print fictitious loan estimates is even cheaper. Experience, Certification, a Good Reputation and Professionalism are priceless life-long attributes and qualities you want in your Mortgage Professional. Leave the spreading of such worthless papers to those lying, low-balling, bait-n-switching, short-termers who do not deserve to work with someone like you who, understandably, expect it to get done right the first time.