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Alan Openshaw's Blog

By Alan Openshaw | Mortgage Broker
or Lender in Warminster, PA

Questions that you should be asking your mortgage lender

When dealing with clients I am amazed at the questions that they ask in an attempt to select the best lender for their situation. Usually the questions that come up first are.
What is your rate?
You don't charge points do you?
What bank are you using?
Is there any pre-payment penalties?
I recently had a client ask me the rate without giving me any personal information. I asked what he did for a job and when he told me that he was a computer consultant I asked him to tell me how to fix my computer. He asked what the problem was and I replied that it was not working correctly and thats all the information he should need. He said he could not do it with so little information....and then asked me what my lowest rate was. Clearly he did not underrstand that without the information about my client I am merely quoting an arbitrary number. I quoted an extremely low arbitrary number and even then he felt that he could get a lower number elsewhere. I guess it never dawned on him to ask what was involved in getting that number.
My point is that unless you are an extremely savvy mortgage shopper you end up getting a mediocre rate with mediocre service from someone who did not provide you with all the information to make the best decision.
So how do you spot the salesperson from the service provider?  In trying to secure someone's business it is a common theme to let the customer hear what they want to hear but when it comes to the biggest investment of your life sometimes you have to be willing to look for the truth.
People are looking to shop by the numbers as it is the only way that they can guage their succeses. However, if you are not locking in a loan that day, then again you are going by arbitrary numbers. Forget the numbers as a starting point: it is just a bad starting point.
My suggestion is find several lenders who have been recommended by people whose opinion that you respect. People who you think are knowledgeable and smart shoppers and who are at time tough to satisfy. Chances are if the friend that is always complaining about something, but wants to recommend a loan officer, then they must have done something right. Ask some questions about
the lender. How much did the loan officer ask about your situation? Did they get a firm understanding of what you were trying to accomplish. I once had a client that set a budget of $1500 a month and went ballistic when my estimate came in at $1504. I told him to relax and skip lunch once a month to make up the extra $4 but according to him I clearly didn't understand his goals.
Ask about a lenders product knowledge. Were all of the details and options explained up front? Was any pertinent information omitted but later surfaced that may have affected their decision? I am often told that it's not what was said, but what was not said that caused frustration between my clients and other lenders. I just referred someone to a retail lender and it took them a week to provide their fees to myself and my client. Is that an important factor when my client has 30 days to settle and can't afford to waste time choosing between lenders? Yes it is.
How easy was the lender to contact and how quick to respond to your questions. If your rate isn't locked and you are following the market and it looks as if rates are starting to run higher, how good is it that the rate quoted was great but you can't lock at that rate because he is unavailable. This will be very important as I will show you later.
Ask if the lender was helpful in providing extra advice. Sometimes it may be that starting the process earlier will allow the client to improve their credit score and lower their costs. Was the lender able to help them do that by either using credit repair or showing them how to reorganize their debt. Ask about the loan officers strengths and weaknesses and compile a list of attributes that you want your loan officer to have. Compile a list of questions to ask the lenders that you have chosen. Then call them up and interview them. Throw in a couple of questions that are pertinent to your situation and see how they respond to it. "I just ran my credit and I have a 614 score. Can you help me. How? Specifically what are you going to do? What does my score need to be ? Does a 640 score get me a better than a 639? Is a 660 better than a 659? The answer to the last two questions are yes but its a good question because if the lender isn't willing to helpyou lower your costs ny helping you inprove your score, then why would you want to use them. I think if you ask questions and are provided with knowledgeable answers then you can differnetiate between experienced loan officers and inexperienced ones. If someone answer s your questions with "yes we can do that too" Ask them to provide you with the reasons why they are not volunteering any information.
Maybe I am starting to ramble here but I am asking for more comments on other questions to ask. Now here is the important part of the process. You have eliminated several lenders and you may be left with two or three. Have a complete loan application taken without the credit being run. You can supply them with a credit report you have recently taken for yourself if you feel that running three scores on the same day will affect your credit. Knowing that banks mortgage  rates come out each day by 10:30 am, on the day that you are ready to lock your loan call all three for a quote at 11am. Tell them you are locking that day and it must be a 30,45 or 60 day rate lock and specify a maximum origination fee. Ask the first lender that you call what his fee is and tall them to match that. Right now if it is a refinance most lenders can close in 30 days. By 1:30 you should have three quotes and be able to discern who is offering the best deal. At the end of the day you will probably get a good good rate from a lender who will be professional curteous and helpful so that your homebuying process is not a burden to your stress level.
ext time you think about asking what is your rate, please think of all the other good questions you could be asking.

Alan Openshaw

Cornerstone Lending Inc

Southampton Pa 18966

215 953 0800

cell 267 992 7276


NMLS ID 143960    

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