Financing in Atlanta>Question Details

Des, Home Buyer in Atlanta, GA

What's the best way to find a really good lender? And does the information they gather effect my credit?

Asked by Des, Atlanta, GA Tue Mar 18, 2008

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19
Hi Des,

I agree that finding a lender through a referral is the best way. I do want to caution you and tell you that right now the lending industry is very volatile and there are many changes being made; that being said, when you do talk to a lender(s), make sure you ask them about the market conditions and how long they are going to be able to offer you certain products. I have found in the last several weeks that interest rates have fluctuated several times a day and products that were once available are being pulled off the shelf.

Another thing; many lenders have the room to match rates and/or be competitive with one another, so if you find one lender that has quoted you a higher rate and you are more compatible with this lender, you can provide proof that another lender has given you a lower rate. In many circumstances, lenders are willing to work with you to earn your business (within reason of course).

I would also recommend you work with a direct lender rather than a mortgage broker (brokers work with many companies and have to rely on them for products) because direct lenders in general have more control over what happens in the lending and underwriting process and usually have better relationships with the people who are underwriting the loan.

Some reputable lending companies; FIrst Horizon, Wells Fargo, Suntrust, Chase.

Try contacting Mali Deasy; 404-279-4500. I have worked with her for several years now and she is honest and reliable.
2 votes Thank Flag Link Wed Mar 19, 2008
Des:

You MUST find a good lender. The 2008 contract is a no holes barred contract that will take every penny of your earnest money if your lender fails to get the job done in the amount of time negotiated in your contract.

To find a good lender means that you ask a ton of questions (you name it, ask it) and that you check with very recent clients to deem their success. You also, must be ready, willing and able to supply the lender with every request for documentation and that can be on the turn of the dime.

Most buyers find the house and then the lender, WRONG. Find the lender, get pre-approved and use it in your favor to negotiate a strong purchase and sale agreement.

As far as your credit, my understanding, although I am not a mortgage broker, nor am I licensed for that, is that the credit check mars your credit score slightly. So, the bottom line there is, don't piddle with someone until you are sure that you are speaking with someone competent and efficient.

Hope this helps.
1 vote Thank Flag Link Sun Mar 30, 2008
After being at the closing table many time waiting for the "internet based mortage companies" to answer their phone or return a call as to why the loan is not funding, is not a place you want to be on closing day.

Having a local trusted and true mortgage company by your side or at least reachable by phone offers a high level of comfort.

As for your credit reporting issue, make all of your inquiries with a 15 day period and the effect will be insignificant on your credit scoring. If you credit scoring is border line in the beginning, it can make a difference.

Most agents have relationships with local trusted mortgage providers, but as always get more than one provider to provide a good faith estimate of mortage cost and last but not least some of the charges are negotiable. If you don't ask, they probably won't offer the absolute best bottom line deal.

Malcolm Boartfield, ABR
Fine Home Speciaist
Prudential Georgia Realty
404-915-5891 (cell)
Web Reference: http://www.buycobbhomes.com
1 vote Thank Flag Link Thu Mar 20, 2008
Hello Des,
I must agree with some of what is being said here. Referrals from an agent your working with or a trusted loved one or friend is always a good start. In this day and age with the implementation of blogs, find a few who peek your interest and follow them. You probably won't only gain insight to them as a Professional, but into them as a person.
Your credit will only be adversely effected if you have a bunch of different entities pulling it over let's a 2 week time frame (applying at let's say 8 different companies). My recommendation is interview the lenders, just as they will interview you. Narrow it down to three and find the right fit as far as products and somebody you connect with on other levels as well. Trust is built...
1 vote Thank Flag Link Wed Mar 19, 2008
What is a really good lender?
Do you mean, a bank that will give you a lot of money with no down payment?
answer: probably none, you most likely will need a down payment nowadays

on the credit thing, thats top secret, fico doesn't tell anyone except Ben Bernanke how they computed your credit score. but some people suspect that many inquiries into your credit is bad for your fico score.
1 vote Thank Flag Link Tue Mar 18, 2008
I always do business by referral. Talk to family, friends or co-workers about their experience and who they used and liked, or more importantly who to avoid! Call you agent and ask for 3 lenders and then compare the three. The information they gather from you will NOT effect your credit score. In fact, I think its great to talk to a lender well in advance of narrowing your search for the perfect property. Given today's flux in the financial markets, use a lender who has a solid set of programs that will have a good chance of existing for more than a week. A good lender will be able to "pre-approve" a client within a couple days max.
1 vote Thank Flag Link Tue Mar 18, 2008
From http://www.myfico.com:

"What to know about "rate shopping."
"Looking for a mortgage or an auto loan may cause multiple lenders to request your credit report, even though youre only looking for one loan. To compensate for this, the score ignores all mortgage and auto inquiries made in the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping. In addition, the score looks on your credit report for auto or mortgage inquiries older than 30 days. If it finds some, it counts all those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score."
0 votes Thank Flag Link Mon Jun 30, 2008
Malcolm Boar gave the best answer. Find a local realtor you trust and ask for referrals. Then do as Doug suggests and get all the good faith estimates in one day. Listen to what Malcolm said about being at the closing table unable to close because the lender doesn't respond. That happens more often than you can imagine. If it ever happens to you, you will then see the value of having someone who will answer the phone and respond in person, if needed.
0 votes Thank Flag Link Sun Jun 29, 2008
1. What is the interest rate?

This is the most obvious question. The interest rate is used to calculate your monthly payments, and it will determine how much you’ll pay over the life of the loan. But you’ll need to understand more than simply the quoted rate. A good benchmark for comparing offers is their annual percentage rate (APR). This figure combines the interest costs and other fees charged by a lender over the life of the loan, and expresses them as a yearly percentage. Make sure to also ask for an itemized list of what’s included in each APR calculation, so you know you’re making a fair comparison, as some lenders don’t include all of their fees in the calculation.

2. Will the interest rate change over the life of the loan?

In the case of a fixed rate mortgage, the interest rate will remain the same for the entire term of the loan. Adjustable rate mortgages, however, have interest rates that change periodically. If you’re considering an adjustable rate mortgage, make sure you understand what the adjustment period is -- that is, how often the rate will change (usually annually). Also, ask what the index and margin are that will determine your rate, and find out what caps will protect you from large rate increases. You can request a chart showing the past performance of the index the rate is based on, which will give you an idea of the rate swings other borrowers have experienced in the past with the same mortgage.

3. Will I be charged points?

A lender may offer to lower your rate if you pay discount points up front. One point is equal to one percent of the principal -- two points on a $150,000 mortgage, for example, will cost $3,000, and might lower your rate by 0.5 percent. Lenders may also charge origination points, which are an administrative fee for processing your application and do not affect the interest rate. Make sure you understand which type you are paying for.

4. What are the closing costs and other fees?

Ask each lender for a good faith estimate of their closing costs. (Lenders are required by law to provide one within three days of your application.) Take the time to go through each estimate carefully to be sure you understand what each item means. This is important when comparing offers as lenders sometimes use different terminology for the same item.

5. Will you lock-in the interest rate?

A lender may allow you to lock-in the interest rate and points quoted in your offer for a specific period of time, often 30 to 60 days. This will protect you if rates go up during the time it takes to process your application. Ask what date the lock-in becomes effective and whether there is an additional fee involved -- and get the agreement in writing.

6. How will my down payment affect the cost of the loan?

Some lenders require only a very small down payment of 3 or 5 percent, and some even offer zero-down-payment loans. But these may carry significant costs to offset their inherent risk. Typically, if your down payment is less than 20 percent, the lender will require you to pay for private mortgage insurance (PMI). On the other hand, you may be able to reduce the cost of your loan, or at least improve the terms, by making a larger down payment.

7. What documentation do you require?

Lenders will ask you to provide a bundle of personal information, such as your income, employer, social security number, information about your assets and an appraisal of your home. Ask for a checklist so your application is not delayed by missing paperwork.

8. What are the payment terms?

Ask each lender what method of payment they require, such as sending back a coupon with a check or arranging an automatic withdrawal from your bank. Determine whether there is a grace period (typically a week or two), and ask about late payment fees.

9. Can I pay the loan off early?

Chances are you may want to refinance your mortgage before the term is complete. So check whether a lender will charge you a prepayment penalty for doing so. Some may also charge a fee for paying down a substantial portion (more than 20 percent) of the principal before it is due.

10. How long will it take to close the loan?

Processing a mortgage application can be time-consuming. Ask each lender how long they expect it will take to review your documentation, check your credit rating and approve your loan. A minimum of two weeks is typical, though it is not unusual for it to take six to eight weeks to close a mortgage.

11. What might delay the process?

Ask each lender what information -- employment, marital status, other outstanding debts -- they will be checking, and make sure you advise them of any changes in these areas. You can also head off problems by checking your own credit file a couple of months before shopping for your mortgage.
0 votes Thank Flag Link Sun Jun 29, 2008
Des,
Be careful about someone who only gives one name for a lender. It is best to ask you Realtor (be sure you agent is a Realtor) and make sure you get at least 2 or more names. We have lenders we have worked with many times and a few we have personally known for over 30 years! These are honest people. If you are interested, see our website or email us at purrfecthome@comcast.net and we will be more than happy to send you the list of people we work with. We provide 4 names!
Good Luck,
Steven & Tascha Katz
RE/MAX Greater Atlanta
Web Reference: http://www.purrfecthome.com
0 votes Thank Flag Link Tue Mar 25, 2008
The only way - Referral*

* You must get a few referrals. Just because someone's loan did not explode and they felt good about it, does not mean that the lender/loan person is SKILLED.

I choose Theresa Laine @ American Mortgage - She walks my clients through the process and follows up with everyone involved. Plus, she always has a backup plan. You can reach her at 770-891-4121.

2. ALSO - YES if they "pull credit" then it may affect your credit score. You can "shop" up to five, but I recommend doing three just in case someone pulls your credit twice.

GOOD LUCK
0 votes Thank Flag Link Fri Mar 21, 2008
Joshua Jarvis, Real Estate Pro in Duluth, GA
MVP'08
Contact
Good morning Des,
Referrals are your best bet. If you are working with a Realtor you trust, call the lenders they work with. Also go to friends or family members and see what they have for you. You can call these lenders, interview them and give them minimal information. Do not allow them to pull your credit! Once you decide which lender you feel the most comfortable with then have that ONE lender pull your credit. Get your loan secure and get fully approved, then you will be ready to look for your home!
Good luck!
0 votes Thank Flag Link Wed Mar 19, 2008
With the rise in "social" forms of media, "networks" as a relationship concept, and broader platforms for such communication like Trulia Voices, the value of a trusted personal referral resonates strongly with most people.

The immediate value is greater than most other ways of discovering talent, isn't it?

Word of mouth marketing.

I don't know your business, your relationships that matter, or your family, but I recommend that you interview 2 personal referrals and 1 other interesting choice, and remember - there are probably 100,000 lenders statewide, and there are about 36,000 real estate agents in metro Atlanta.

You will be able to dissect the punks from the professionals.

And yes, pre-qualification affects your credit. So, get serious. The event of a mortgage pre-qualification merits valid consideration - remember, in Georgia, your pen to paper on a real estate Purchase and Sale Agreement is as good as cash.

Get good advice and get your real estate on.
Web Reference: http://www.womma.org/
0 votes Thank Flag Link Wed Mar 19, 2008
Hi Des,

Referrals is the way to go - someone that is tried and true.

There is a little misconception on how credit inquiries affect your credit scores. Here's how it works: you have a 45 day window - during the intial 14 days, you can have your credit pulled numerous times. After the 14 day window, there is a 30 day waiting cycle and on the 45th day (14 + 30), all those inquiries that occurred during the initial 14 day window only count as "1" inquiry. AND.... credit inquiries only count for 10% of your total credit score. So what would happen if you have your credit pulled on the 15th or 16th day? Then the 45 day cycle starts over.

Here's a suggestion when comparing lenders - get a Good Faith Estimate from each lender and compare line by line. Make sure you do this in one day, because rates change on a daily basis.

Good luck to you!
0 votes Thank Flag Link Tue Mar 18, 2008
Des....

Your best bet on selecting a lender is to ask for referrals. If you have selected a Realtor ask them for several names and numbers. Ask friends, family and work associates for referrals. Working by referrals is the best way to go. Good luck.
0 votes Thank Flag Link Tue Mar 18, 2008
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
Des, I know that you did not necessarily ask for a referral but I have to provide you with a lender that I have worked with for many years. There has not been another lender to beat him on closing cost or rate when comparing apples to apples. He is great!

A good lender will need to pull your credit which will lower your score slightly. Gathering other information needed does not effect your score. A good lender will consult with you based on your goals and what is best for you.

It would be worth your while to contact Jim Cheeley with Lincoln Capital which is 678-527-1150 Ext 24. He is fabulous!
Web Reference: http://www.HomesByLorie.com
0 votes Thank Flag Link Tue Mar 18, 2008
Des, usually your Realtor will give you a list of at least 3 lenders that he/she has worked with and knows to be ethical and effective. I always recommend that my clients talk to several lenders before making a decision. You will find that you "click" with one or two. This is important as you will have lots of questions and will want to be sure you fully understand the type of loan that best meets your needs. Different lenders offer different programs. If you are credit challenged you will need a mortgage company who can shop your loan around. If you have a great credit score, you will want to shop for the best interest rate and program. As with all real estate decisions, this is another one that a good Buyer's Agent will be able to guide you through. The lenders will want to pull your credit in order to accurately assess your situation. Your credit should only be affected once per purchase. If you pull it now and don't buy and then pull it again in a couple of months, it will affected your score twice. I hope this makes sense.

~Carol
Web Reference: http://UseVinceandCarol.com
0 votes Thank Flag Link Tue Mar 18, 2008
Hi Des,

One of the best ways to find any service professional is through a referral. Realtors tend to have solid relationships with several mortgage brokers and can point you in the right direction. I, for instance, have several that I can refer you to. Please feel free to either call or send me a quick email and I'll get you the list right away.

To the second part of your question, the quick answer is no. By having an initial consultation appointment either in person or over the phone. A good mortgage broker can advise you by getting answers to general questions without pulling your credit. Once your credit is pulled, the broker can give you a better idea of rates and payment options, but this does appear as a inquiry on your credit. I have heard, though I think the jury is still out, that you can have your credit pulled a few different times within a 1 to 3 month period for the purpose of aquiring a mortgage without any negative impact.

Hope this helps!

Jolie Abrue
Keller Williams Realy Consultants
(678) 894-4409
jolie@helpinghomes.net
Web Reference: http://www.helpinghomes.net
0 votes Thank Flag Link Tue Mar 18, 2008
Not by looking in the phonebook! Check out bankrate.com for some ideas of lenders in your area, you need to decide what type of loan that you may be looking at like FHA and make sure that they are able to do FHA loans.

With regards to your credit rating being affected, make sure that your credit is being pulled only by a trusted reputable company. Ask for a copy of your credit report and if your shopping try and do it all in a 3 day time span. I've seen it way to often where the broker will run credit and then submit that through DU/DO and then it's pulled again, then the lender pulls credit AGAIN and before you know it you have over 30 inquiries in no time. BE CAREFUL
0 votes Thank Flag Link Tue Mar 18, 2008
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