When it comes time to selling or buying a home, hiring the right real estate agent makes your life so much easier throughout the process – but have you considered how much of a difference landing a good lender makes?
Here’s a common scenario: You’ve done the math, then to your surprise, closing costs equate to over a grand higher than the original estimate.
Why? Not all lenders are trustworthy.
It is an unfortunate fact that there are misleading lenders in the business who will sneak in extra fees during closing, because lenders are not obligated to Good Faith Estimates, or to find you the best suited loan for you. Many brokers look for mortgages that offer them the greatest profit, rather than a deal for their client.
Choosing a lender that understands you, and you trust, helps significantly when working towards a timely and successful closing. Here are a few ways to find a good lender:
Have your real estate agent refer a lender when buying a home
Know that many brokerages have in-house mortgage lending businesses, but a good agent will not limit their recommendation to only their in-house lender. An experienced real estate agent will most likely have a firm relationship with a preferred lender they have worked with in the past. A proven track record is a good sign that you are making the right decision.
Have your friends refer a lender
If you have friends or family that have recently purchased a home, ask them who their lender was and if they feel that they received a fair exchange. You can assess the whole experience from their perspective, and evaluate whether or not they chose a reputable lender that was enjoyable to work with. Ask them if the rates they were promised were the ones they got.
Compare mortgage lenders by asking questions
- Asking the right questions is the best way to find a trustworthy lender:
- What are your fees and how are they broken down?
- What are your points?
- How much do you stand to earn from this loan?
- Can you get this done in time for closing?
- Where will you get approval for my loan from?
- How much is the estimate for my closing costs?
- Can I see the HUD-1 closing statements for the last two or three deals you completed?
Compare the different answers each lender gives you to determine which one really seems to be putting forth the best effort to meet your goals. In addition, Google reviews on the mortgage lenders you are interviewing to see what others have to say about their reputation. You can always contact the Better Business Bureau for more information.
It might be in your best interest to follow up with several of their former clients to see if they followed through on their terms and agreements.
When in doubt, read the contract before choosing a lender
Go over the fees, closing costs, interest payments and hidden costs in the contract, and if you have any questions, be sure to ask for clarification.
Lenders that ask for a deposit in the form of “earnest money” or a Good Faith Estimate may have clauses allowing them to keep your deposit whether or not you choose them as your lender.
When you find a lender willing to work with you and for you, then you can breathe easier during closing. Arm yourself with knowledge and do not be afraid to ask questions. Contact The Atlanta Homes team for more information!