I am still not compensated for any referralâ€¦.nor am I looking for such. Butâ€¦.I am now free to refer lenders, insurance firms, and title companies based upon the value and workmanship of the companies.
Is your Realtor recommending in-house services? When I was with a large One-Stop real estate company, it was a revolving door in the mortgage dept. I witnessed changeover multiple times per year in some years. I met great mortgage reps and a few that I wouldnâ€™t provide the time of day. Because a referral is in-house does not make it, in itself, a poor recommendation.
Today, I am independent and can make whatever recommendations I choose. I have no objection when a buyer wants to work with their own bank, or lender of their choosing. I sometimes hold my breath and â€œhopeâ€ I am going to get a lender representative who will be cooperative, attentive and work as a partner to move things along smoothly and quickly for the buyer. Sometimes I have been saddled with the mortgage rep from hell, and other times the introduction through the buyerâ€™s lender of choice has led to a new relationship that actually ends up on my future referral list.
The bottom line. Your Realtor wants your transaction to go smoothly and having a knowledgeable and attentive representative on the lender side is important. Your Realtor will make recommendations to you based upon this. It remains your choice to pick the lender you want to do your loan.
It is often wise to shop with a few prospective lenders before making a decision.
Using a realtor that a realtor recomends is using someoen they have used in the past and done a good job, otherwise they wouldnt be recomending them. You can ask if they have any relationship with this company such as finicial, personal or are they friends. Sometiomes using a bank you already bank with can be easier IF they ofer the program that suits your needs. It doesnt cost you anything to talk to the referred company so you have something to compare it to. If you just signed up for an account at that bank, thenm you really dont have a relationshipo, if you have been there for 10 years then you do. Also ask friends, family and coworkers who they recommend, a good referral is always the best. Good luck with your purchase.
My client now has three good faith estimates. I found that the name brand bank, who everyone in his office used, showed a lower interest rate so that they all thought she was the best deal. But the way she was doing that was having them pay discount points to 'pay down' the loan rate. Her actual loan rate was 6.875, while everyone else was offering 6.25 without paying points.
What does that tell you? For most people trying to get a loan, it's difficult to read the good faith estimate to compare . Find someone who can help you understand what the offer really is. Take the time to learn what the GFE is saying. Compare the APR and ask specifically what charges they are including to calculate the APR and what charges are still not included there. Don't be afraid to make sure you understand it, or get someone to explain the differences between the offers.
Usually a Realtor suggests lenders with whom his/her clientys have had excellent service. (By the way, a Realtor is not allowed to receive "kick-backs" or monetary compensation for referring you to a lender.) The only reason he/she is making suggestions is for your benefit--the Realtor wants the purchase of your new home to be as stress free for you as possible. This is good business for the Realtor because a smooth and satisfying buying experience means you'll come back to that Realtor someday when you sell your house. Your Realtor's business is also driven by the satisfaction of his/her clients.
Finally, there is a difference between mortgage brokers and bank lenders. The main difference before the recent credit crunch was that brokers are middle men who have sometimes as many as 90 banks they can turn to to find a mortgage that most closely meets your needs; whereas, bankers are more constricted--they have fewer resurces with which to work to find the exact loan that you are seeking.
Shop a mortgage around like you would a new car. Go to a broker and a banker as suggested by your Realtor (unless you have a personal relationship with a lender) and ask each what they can do for you. Compare the terms, then decide. Be careful of the fine print. What looks like a deal on the surface may not be because of other fees and charges. Know what you are signing. Ask questions.
I hope this was helpful, Lee. Good luck with your future puchase!
There are lenders that agents do recommend because they know that they do a good job, treat the client with respect are honest and get things done in a timely manner. I always tell me clients to go to whoever they are comfortable working with and have the best program for them and if they want me to recommend someone I give them 3-4 names of people that I have worked with well in the past. I leave it to the client though.