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Buying a home, Buying a home in Hanford, Buying a home in Lemoore, Credit history, Financing, Mortgage loan, Purchasing a Property, Qualifying for a loan
One of the most crucial elements to a successful transaction is who the lender is that is doing your home loan. Usually in a residential purchase contract, there are time frames built-in, benchmarks so to speak. These benchmarks require certain things to take place in a certain amount of time. For example, it may require the transaction be completed in as early as 30 days. It may also require that your appraisal be ordered, completed, reviewed, and returned by the 15th day or the 17th day. Some lenders, especially some of the larger financial institutions, tend to have a lot of procedural red tape that can and do cause unnecessary delays. You would want to make sure whomever your lender is that they are on the ball 110%.
So how do you know who to choose? Here are some tips that can assist you while researching a good lender.
1. Agent Referrals: If you are working with a real estate agent or know who you will be working with. Ask for their recommendations. An experienced Realtor should be able to supply you with the names of numbers of reputable lenders they have worked with in the past and can vouch for. Ask them why they prefer to work with those lenders and why using their recommendations is to your benefit. Realtors are prohibited by law from receiving any referral fees from lenders. Our sole purpose to finding you a good lender is to make sure the transaction closes on time without any glitches.
2. Ask Your Friends: Friends who have bought a home or refinanced a home are a wealth of information when it comes to who provided their home loan. Ask them if they were satisfied with their interest rate, if their lender was good at returning phone calls and emails, and if their lender was able to get everything done in a timely manner. If you’re friends were happy with the process, chances are you will be too.
3. Direct Lender Vs. Mortgage Broker: When you call different lenders, ask if they are a direct lender or a mortgage loan broker. Direct lenders originate the loan and all decisions on your credit worthiness are made directly by them. Mortgage brokers send you’re information out to a 3rd party that will originate the loan. Direct lenders are most often preferred or a brokered loan due to the fact that there is no third-party involved and the transactions are less prone to delays and “hiccups”. In essence, the lender has more control of the file and it’s less prone to delays.
4. Local Lender Vs. Big Bank: This is an important consideration when selecting a lender. In general Local lenders are smaller, most can offer competitive interest rates, they have an office within driving distance that you can physically go into to meet your lender and, if they are a direct lender, they do all the processing within their company which allows for good accountability. Larger Financial Institutions, such as Chase Bank and USAA are direct lenders and service a nationwide client base. They may have a loan officer in your local bank, but often your file is processed in several locations in the US. It’s possible to have 5-7 people working on your file at different times and who work in different time zones. If you’re considering your bank, ask them to explain their loan process and find out where your file is sent for underwriting and final loan approval. Does it take place in their branch or does it get sent out to Denver, Colorado?
Who you choose as a lender is cornerstone to a successful transaction. It’s important to get a good interest rate, but it’s also critical that your lender be able to meet all your needs and close your transaction timely. It’s worth the research!