Where do I get my loan?
That is a great first question. There are so many options out there. Most Realtors have found at least a few great lenders that they like to recommend. The best lenders are those that help their clients get into good loans with great rates and do their best to get that loan with little to no problems as well as quickly.
How to find a good Lender
It is generally a good idea to talk with at least three different lenders to see what rates and fees they can offer you. I’d also find out which loans they may recommend for your personal financial situation.
Have a good conversation with the various lenders. Through this process you are likely to find one that will work well with you. It is really important that the lender be able to listen to your needs and that they can be with you every step of the way through the process.
Why I suggest Mortgage Brokers
When I discuss lenders with my clients I often give them the name of a couple of lenders that are loan brokers.
Mortgage Brokers can generally broker a loan from a number of sources. This is one of the biggest advantages to using a mortgage broker. They can listen to your financial picture and help you find a loan that will fit your needs.
One of my clients was able to get better rates and fees from a major national bank through the loan broker I recommended compared to the mortgage officer who came from the same bank.
When to go to a Local Bank or Credit Union
When I am trying to get a buyer into a property that has loan issues, whether it is a lot, a modular or manufactured, or in a niche area with appraisal issues, I will strongly urge my client to talk with one of the local, community banks or credit unions.
The local banks and credit unions are in a much better position to understand the various local markets and the appraisals that come out of those areas with comps that are not standard. Local banks generally have a vested interest in helping fund local projects and homes. Some of the local banks do not sell the loans but service them in house.
When to go to a Major Bank
The third category of popular lending options are the major banking institutions such as Bank of America, Wells Fargo, Chase Manhattan etc.
These banks are large conglomerates with multitudes of personnel and departments in separate areas all over the country. They may have the ability to offer better rates or fees then some of the other institutions. I have worked with some of these “in house” lenders and have found for the most part they do fine as long as the property is a standard home with relatively few issues. If your credit is A grade the loan goes through generally very quickly and smoothly.
Timing for a Loan
At this point in our market it is a great idea to talk with your lender about timing for a loan closing on the home you want. For instance, Bank of America was requiring 60 days for a home I just worked on with a gal. The lender we used could have gotten the loan done in less then 30 days if the seller wasn’t using Bank of America as well.
Cogs in the Wheel
The following is how my experiences have left me feeling about the various lending institutions I have dealt with over the years. Picture a machine with cogs in the wheel.
- Mortgage Brokers usually seem to have their wheels greased and on caffeine! Who cares how many cogs they have. They are bright, happy and running for you.
- Community banks have few cogs and seem to go at a fairly good pace. Pretty steady humming. They can do a good job and if a hiccup occurs they seem to roll with it pretty well as they all communicate with each other.
- Large Banks have many cogs and the cogs don’t always work together. Or the one cog doesn’t always know what the other cogs are doing and they run against each other. If you get squished in between the cogs no one notices. The machine just keeps running. No one really knows who is in charge of the wheel. Seems like it just runs by itself. But if you can get in while it’s running smoothly, they can crank a lot of stuff out. They just don’t take hiccups in the machine very well.
Your experience may be different and you can certainly dialog with me about it but after 12 years of working with all the various lenders I have seen a fairly similar pattern in the various lenders I have worked with.
