Nationwide Home Mortgage Loan Company

OK, you have just filled out the online mortgage application, now what?. Your name will be now given to four different lenders who match up well with your specific needs. You are now a “lead”. As a loan officer who used to field these type of leads, I have found that most people will commit to the first person that calls them. In fact the leading lead aggregator reports that up to 55% of their clients will buy from the first lender that calls them.

In my opinion this is not using the system to your advantage. You are going to receive phone calls, whether you like it or not for the next few days. Why not field the phone calls and hear multiple “quotes?

Most people go to the “lenders compete” web sites to to avoid having to grind and negotiate. However, they soon realize that during this process someone is going to have to be told “no”. I have put together this list of Do’s and Don’t’s that I feel it will truly help you get your best deal on your next mortgage.

1) Have a copy of your credit report and your scores - This is imperative. If you are new to this game your opening line will most likely be something to the tune of “What is your best interest rate”. The rate is determined by: Credit Score, LTV, DTI, Documentation Type, Credit Length and a host of other subcategories I will not go into. However, the LO will usually counter your question with “what’s you credit score”. The reason to have your credit report at hand is that you want all of the lenders that are competing for you loan to have a complete picture of your situation before they pull your credit.

This is absolutely essential if you plan to apply online. You can get a free copy as outlined by the new law if you want to a week or 2 but it will not have your scores get it here here. Or you can pony up and get the real deal, get all three of your scores and see exactly what the lender will see. Or you can do what most people do, join a credit monitoring service that will help you keep up with your credit and warn you if anything negative is being placed on your bureau and get a free credit report online.

2) Be able to communicate what your primary goal is to the LO -  This sounds pretty easy doesn’t it? You would be surprised how many people want a lower rate, lots of cash, lower payments and no closing cost. It’s not going to happen. Know your primary goal and be prepared to yield on the secondary goals.

Some people think that they want a lower rate when what they really want (need) is cash to pay off bills. Or vica versa you may want a little cash out when the primary benefit is a rate that is lower than your present one. Know your primary reason for doing the loan and be prepared to take a higher rate if you need the cash and it will benefit you or take no cash if your primary goal is a lower rate. Just be mentally prepared and make sure you are dictating your primary goals not the LO.

3) Take time to speak with everyone that calls - You may get tired of having to explain your situation to four different LO’s but remember what your looking for, the best deal. The one person that calls that you blow off may be the person best equipped to handle your mortgage. If you make up your mind after hearing from two lenders you may have robbed yourself of the ammo you need to lower your rate when you finally make up your mind.

4) Learn to recognize your best deal when you hear it - Many times as a loan officer I have had the higher rate of the companies competing for the loan but won the sale. I did this by listening to the borrower and ignoring the rate my competitor were quoting.The best deal is not only rate! This bears repeating. The best deal is not always the lowest rate. As a LO I always prided myself for thinking outside the box and finding programs that represented the borrowers best deal.

Lazy LO’s will not do this, they simply succumb to the rate game and either low ball their quote or never call you back. One man’s 30 year fixed program does not fix everyone’s problems. There are thousands of different programs designed to fit different peoples needs. This another reason why you should wait to hear from all the lenders that are competing for your business.

5) Negotiate wisely and learn not to show your cards too soon -  Think about the LO that is calling you, do you think he/she wants to put an hour or two coming up with a program that may fit you if you have already told them ABC mortgage is working on this for me? ABC mortgage may be notorious for low balling quotes to get the business and then blowing the borrower up at closing. However if we as loan officers tell you this we are seen in a bad light as bad mouthing the competition.

Keep silent, if asked let each LO think they are the only people you have spoke to. This will ensure each company will work on your loan and deliver their best deal. Then after hearing from all parties begin to narrow the field by comparing the programs you like best and asking one company to match the other.

6) Be sure what your being quoted is feasible and real -  Time after time I have heard borrowers quote a rate that they will not ever qualify for. If you have been quoted 6.5% by three companies and one company quotes you at 5.5% it is likely you are being baited. When you are baited you are usually a week or two into the loan before you find out why you do not qualify for that program or rate. Be careful! Experienced LO’s from reputable companies have learned that by doing this you have a large fall out from application to close and it’s really not worth doing.

Many companies have the philosophy of quoting low and letting the borrower show up to close on the real rate. Guess what, 50% of these people close anyway. Its a bad business model and it thrives with the borrower who looks at nothing but rate. To ensure you are getting the program and rate you are promised always request a rate lock. A rate lock is a formal confirmation of an accepted program and rate. Brokers must do this with their investor and lenders must do this internally. Without a rate lock all you have is a promise, and we have all broke those before.

Tags: Mortgage Tips

This entry was posted on: Saturday, June 7th, 2008
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