Where Should You Start to Get a Home Loan?
The variety of mortgage loan products, the hype from lenders, and all of those tantalizing “Instant Rate Quote” buttons yielding different results can make a home buyer’s head spin. Taking the time here to learn some basic concepts about mortgage loans will save you time, money, and grief!
What’s Wrong with Loan Shopping Online?
Securing your mortgage loan is too important for your future to rely on online searches alone. Without a seasoned guide, buyers — especially first time home buyers — who try to navigate the mortgage loan process alone online are at risk. You could find yourself attracted to marketing ploys promising the best deal, only to end up in the hands of unscrupulous brokers more interested in enriching themselves. Or if you think your bank is above reproach and seek a loan through them, you’ll be disappointed to find your options severely limited.
Online Rate Quotes
Can you rely on instant rate quotes on broker and lender websites? NO.
The fact is that rates change all day long. When you request a quote, a data sifter compiles all of the rates available at that moment. In the best case scenario, what you see in the results display is the best, most unattainable rate. In the worst case, you might see bogus information designed to mislead people.
Online rate quotes are a risky way to shop, because they’re there only to entice consumers to submit their personal information. Only a consultation with an experienced mortgage consultant can give you honest, useful information.
Mortgage Lending Makes No Sense
The first concept I want to convey to buyers in my Mortgage 101 education sessions about mortgage loans is that mortgage lending makes zero common sense. It’s a system of arbitrary rules and guidelines that risk managers publish, that the bank underwriter has to meet in order to release the funds of the loan to the home buyer.
The rules of mortgage lending are there to protect the lender, not to help you buy a home.
Underwriters Aren’t Paid to Make Loans
The bank underwriter’s job is to look for any risk to their employer allowing them to kill the loan. They are not in the business of helping buyers learn about mortgage loans and make good loans. In other words, their job is to find a reason not to release funds to the borrower, to protect their employer.
Direct Lenders Have No Fiduciary Responsibility
This means that lenders are busy selling whatever mortgage products they have that will make the lender money. Their priority is not getting home buyers the best possible loan. They aren’t governed by the Department of Real Estate the way independent brokers are.
We Have Your Back
When you buy a car, you might ask a trusted mechanic to check it out before you buy. When you buy a home, a much larger investment, it makes sense to have an independent broker on your side who is going to help you get educated about mortgage loans and get you through the mortgage loan process with the best possible outcome.
As an independent wholesale mortgage broker, my job is to understand the arbitrary mortgage industry guidelines as well as the bank’s underwriter, and then to structure your application in such a way that the underwriter doesn’t have to do too much thinking to say YES.