I keep a list of reliable lenders for my clients’ use. There are lots and lots of good loan originators out there. I know twice as many as I have on my list.
These are the things I expect from my lender-contacts:
1. No over-promising. If you can’t get a conventional loan for these buyers, don’t say you can.
2. Be available. Answer questions.
3. Provide a pre-approval letter that does not disclose more personal information than is necessary.
4. Get the loan commitment in on time. (The loan commitment is the promise that your file is 100 percent approved and the funds are allocated for your mortgage.)
5. Offer a range of loan options, with full explanations.
6. The “Good Faith Estimate” and the actual closing costs should be about the same.
The lender you should want is one with a following of satisfied borrowers. They have a long-range perspective on their business. That lender will say, “You should not borrow that much” instead of "Here is a way to do the impossible." When the subprime mortgage crisis was coming to a head in 2007, I made some phone calls to the lenders that were on my list. Not one of them had been writing subprime mortgages. Some had a few subprime mortgages written by another person in their office.
To find a lender on your own, these are the things I recommend:
As a rule of thumb, the loan originator/loan officer matters more than the company. There were people writing irresponsible loans sitting two desks away from honest and reliable people. If you find a loan originator who was working in 2003 who is still in business, chances are that they did not fall into the temptation to write irresponsible loans. Call friends or family who bought in Massachusetts before 2003. If they are still happy with their mortgage lender, find out who they used. If they got painted into a corner, find out who they used and avoid that person.
Does anyone else have tips for the new borrowers?
The author is solely responsible for the content.