Every lender that follows me on any form of social media will read this one! As you can imagine, the headline of this article needs to be proven wrong. Badly. The vast majority of purchasers will secure financing for their home sale. There are thousands of different mortgage companies out there that will advertise low rates, little/no closing costs, and maybe other incentives. How do you know which loan officer will serve you best?
The first step is working with a trusted real estate agent. Nine times out of ten, they will have a referral for you by way of lending. You are never obligated to use referrals, but typically these are the best contacts for the job at hand. They have been vetted by a professional that needs them to be on top of things just as much as the consumer. No one refers to a lender that did not get it done!
I believe there is merit in using a local lender, at least one that exclusively serves the state in which you are purchasing. There are so many things that happen behind the scenes in the real estate industry that the consumer will never know. Not shady things, I am referring to experienced listing agents who chose to follow up on pre-qualification letters when reviewing offers for their sellers. After all, that pre-qual letter is nothing more than a PDF document. There is a massive element of trust that exists between agents by expecting the buyer agent’s information to be accurate. More times than not, my buyers have won a multiple offer scenario because of my lender. How does this make sense? The listing agent reviewed my offer, called my lender, verified all information to be true and accurate, then accepted my offer. Sometimes, these offers are not the highest offer on paper. But because my lender made the listing agent feel confident in his ability to close the loan, we got the deal. This has happened MULTIPLE times.
This is a big topic. Does the lender that you are working with offer their services “in house”? What on earth does this mean. Broadly speaking, lenders can operate two different ways: direct lending and brokerage. Direct lenders are financial institutions that approve and finance mortgage loans. A mortgage broker brings borrowers and mortgage lenders together by acting as an intermediary between the two. Brokers assist if you want to shop around without the hassle of contacting multiple lenders on your own. I tend to gravitate towards direct lending for my business. With that being said, I have worked with brokerage style lenders that have absolutely knocked it out of the park. The loan officers themselves play a large role in either the consumers or realtor’s decision to affiliate with them as well. All of these have to be taken into account!
Final thoughts. The lender/lending institution that you contract to assist with a home purchase greatly matters. For anyone that wants to get into more specifics, I am available to have conversations “offline” as not to step on toes. What I will say “online”, is that my lender network is strong, and has occasionally been the sole reason for closing deals. Part of being a professional in your field is knowing where your scope of practice begins and ends. As a realtor, I know a lot about lending. But I refer to the best to pick up the torch when it gets too hot for me.