Shopping for a home loan: Do you know exactly what you are shopping for?
I had an encounter the other day with a client that inspired me, so much that I decided to have a cup of coffee this morning and write this blog. Some background on the situation so that you can get the full context of the story, I was referred a borrower from one of my real estate agents I do a lot of business with. The borrower currently lives in another state and is selling her business and moving out to Arizona. Not sure if they have family here as our conversation had been quite brief and I hadn’t gotten that far, but that’s neither here nor there and is an irrelevant piece of my story.
Anyways, the borrower was “shopping for a home loan” as she told me, I immediately started thinking to myself “maybe she doesn’t trust her Real Estate Agent to refer her to a good loan officer when she asked” or maybe this is me over analyzing the situation and people are always shopping for a home loan when they call me, I don’t know. Either way, I proceeded to ask her the question “what exactly are you shopping for?” and I sensed a bit of hesitation so either I put her on a slight defense or she didn’t really know. I proceeded to help her fill in the blanks, I asked her “are you looking for the lowest possible interest rates and fees or are you looking for the best service?” I even decided to take it a step further and ask her “or are you looking for a fine balance of both”? I think that this really put her in a tough spot. None the less I will let you know what her answer was at this end of this blog, but let me just get to the point of why I was so inspired.
There are TONS of companies out there, and by companies I mean mortgage companies, that are advertising via google on pay per click campaigns, banner ads, and even Facebook (lending tree even put a deceptive ad up that was even mentioned today on http://thinkbigworksmall.com/ ). The advertisements contain really low rates that the mass population can’t even qualify for without paying an arm and a leg in origination points, yes you will see this magically low interest rate but lenders are not required to disclose the amount of points or fees it cost to get to that rate just a simple APR in fine print in which nobody even understands. But nonetheless, people click the banners fill out the information and BOOM, their information is sold and you have telemarketers calling you telling you that “oh yea, we can do your loan quick and at the lowest interest rate, oh yea and you’re approved no problem”.
What’s the problem with this you ask? Go to any 10 educated producing full time realtors in the market in which you are buying a home and ask them what the most important thing is when shopping for a home loan and they will answer you, “a lender who is reputable in the market and that can actually close the deal”. Actually close the deal? What are you talking about don’t all lenders close the deal? You may be asking yourself this and my answer is NO, they don’t! Most lenders who have to “buy” your business and give away the farm or at least pretend they are giving away the farm up front usually have a reason they have to buy the business in the first place.
So when I ask my clients are you looking for a fine balance of competitive interest rates and service this is where I shine, I will tell you I am not the “discount loan officer”, you will NEVER see me advertising the lowest seemingly un-obtainable interest rates to “buy” business. However, you will have the most reputable real estate agents in the Phoenix Real Estate market referring me. Oh and I forgot to add, you will have a company that has been in the Arizona market for 30+ years and understands how to save YOU a few gray hairs on your loan transaction.
To sum this all up as it is getting about that time for me to jump in the shower and head to the office, I will let you know that this client finished her approval with me and sent her tax returns and all of her personal information without even asking what the interest rate was.
Happy house hunting people and if you are shopping for a home loan, give me a call, I may not be the best fit and I am ok with that, but I may also be exactly what you are looking for, and that’s ok too!
-Justin, The Electric Loan Officer – Saving you a few extra gray hairs since 2006
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