Everyone wants a good deal. In today’s market of dirt cheap interest rates, I’m talking to a lot of people who are looking for the best rate, at the lowest cost. However, in their search for the best deal, I’m noticing people are losing sight of what’s really important: finding the best solution. Often times, this mistake can lead to a very costly experience.
No two loans are the same…your needs are unique, and so is your financial situation. Unfortunately, many lenders will resort to a “one size fits all” solution without really analyzing your situation. Choosing a competent lender because they can advise you on all your options, is just was important as choosing a lender for their low rates and costs.
So, how can you protect yourself from the lenders who are out there just looking to make a quick buck?
Here are 4 tips that will help you distinguish between the Good, the Bad, and the just plain Greedy lenders out there:
1. Ask for a quote.
The easiest way to find out if a lender knows what she’s doing is to ask her, “What’s the best rate can you offer me?” If she starts rattling off rates without collecting any information from you, say ‘goodbye,’ and HANG UP!
Any responsible lender will need to ask you several questions before she can accurately quote you a rate. Many factors go into determining your rate, such as your credit score, income, debts, type of property, occupancy, etc. Quoting a rate without any information is like a doctor prescribing you medication, without first asking what your symptoms are.
2. Test their knowledge.
Anyone can take an application, collect your paperwork, and turn it into the bank. But, you’re not looking for someone who can just take an order. You’re looking for someone who is knowledgeable about the current market, and can help you decide which options are best for your family.
Ask the lender what is currently happening in the market, and what upcoming events might affect interest rates. A pro will know the answers right off the top of their heads. If they don’t know what the trends are, chances are they won’t know to lock your rate before they jump either. If you want to know what’s going on in the market, feel free to give us a call and we’ll fill you in.
3. Compare Apples to Apples.
As you compare estimates from different lenders, don’t just look at the bottom line. The only fees you can judge a lender on are the “Lender Fees.” All other fees are determined by a third party, and are beyond a lender’s control.
A sneaky trick lenders will use is to under-quote third party fees to make their bottom line appear cheaper. These lenders are expecting you to just skip to the bottom line, and don’t expect you to be informed. Look for a lender that will take the time to explain each fee, line by line. Usually, a lender that will explain the costs in detail and answer your questions, is a lender with nothing to hide.
4. Trust Your Gut
If it seems too good to be true…well, you know the rest.
I see many people ignore their gut, and end up paying dearly for it. All lenders get their interest rates from the same place – mortgage bonds. As such, all your quotes should be relatively within the same ball park. If a particular rate is insanely lower than the rest – proceed with caution! There might be hidden fees that you won’t find out about until it’s too late in the process. Remember, a bank is a business, and they WILL make their money somewhere.
Every industry has their bad apples, and the mortgage industry is no exception. But, there are plenty of honest lenders that are dedicated to providing great service, and helping people. You can protect yourself by staying informed, and asking lots of questions.
If you would like to know more about your options, or just need a second opinion, feel free to give us a call.