First Contact Tactics to Avoid

 Negotiating with four different lenders is best described as a poker game. You don’t want to show your cards until you have to.

Unfortunately, borrowers do not play this poker hand as often as the LO does and that’s the real reason we built this tutorial.

Over the years I have noticed some predictable behavior and learned how to bypass it and even capitalize on it. So I have compiled a few of my favorites below.

1. What’s your best rate? – Classic, if I only had a nickel… most people feel the need to ask this question in the first 30 – 60 seconds of the first phone call. I have heard this so many times that I have a standard pitch that I use to bypass this false objection. When borrowers ask this questions before we have discussed the loan it usually means:

1. They have already spoken with another lender and if I do not give them a rate that is as good or better, without knowing the facts, they are prepared to hang up. Most LO’s give borrowers an imaginary interest rate at this point then systematically tell them why they do not get that rate.(Or)

2. The borrower is naive about mortgages and is very apprehensive about dealing with anyone. Asking this question "what’s your best rate" is similar to asking your doctor "What’s your best medicine? " (OR)

3. The borrower has heard an advertisement that has advertised an impossible rate and imaginary terms that only Jesus could qualify for during the second coming and wants to see if you can beat it.

Regardless, I advise that you steer clear of this question. If you think about it, you will know rates closing costs and everything before you choose a lender. Pushing the issue early into the conversation invites a starving salesman to stretch the truth to keep you on the phone.

2. How Much Are Your Closing Costs? : Ditto, Interest rates and closing costs have an inverse reaction to each other. Meaning, low rates result in higher fees and higher rates result in lower fees. The point of contention is where the lender puts his or her profit. (We all make one) We have a short primer on closing costs here.

3. Filling Out the Application : Do not fill out the application at work unless you want to receive phone calls there. You are going to field 3 – 5 phone calls almost immediately. We suggest that you try and fill out the application on a day off. If you cannot, put directions in the notes section for the lenders to call after work.

4. Answer each caller the same – We know borrowers get tired of repeating the same information 4 times to 4 different lenders, however it’s the price of a good deal. The third or fourth caller may very well be best equipped to offer the best deal. Answering the phone like Lurch from the Adams family and acting as if this person is an imposition can potentially rob you of the best deal.

5. Do not put your work number on the application – We will call you there, a lot. If you do not want to receive phone calls at work use your cell for the work number.

6. Do not give bogus information on the application – This is a mortgage for goodness sake, we will find out.

7. I only wanted a rate – Keep in mind, lenders pay up to $50 bucks for the right to speak with you. If all you want is a rate, they are posted all over the net. If you are seriously interested in a rate for your specific situation, that’s another thing.

Most people that say "all I want is your best rate" really want to know "what is the best rate I can qualify for". Inexperienced loan officers will usually shoot a rate and then try to talk them into a deal… this rarely works.

8. Do not hang up or be rude to me for no reason – Hey, we’re people too. Answer all of the calls politely and simply say we have changed our mind or something like that if that is the case.

If you really want to get the lender to never call you again tell them something like " I am so glad you called. We are in the middle of foreclosure on our double wide trailer and need some help" This should do the trick.

9. Tired of your phone ringing? – You are going to get 4 – 5 lenders that call you. If you speak with two and ignore the other three they will continue to call, their boss makes them. Besides, if you have made your mind up after hearing from only two lenders you are not working the system and will most likely pay too much for your mortgage.