How to Pick the Best Mortgage Lender
For more than 100 years, when a borrower set out to pick the best mortgage lender, that person went to the bank. Maybe there was only one bank in town. The bank's customer tied up her horse and moseyed into the bank. Business was often conducted on a handshake with the sole individual entrusted with the job to review assets and the borrower's ability to repay the mortgage.
Today, of course, there are banks on almost every corner.
Although, it is still possible to meet face-to-face with a loan officer, it's not necessary to meet in person to obtain a loan. Many loan applications are handled electronically, online. In fact, when it comes time to sign your loan documents, a mobile notary can come to your place of business or residence, making your personal appearance before a notary convenient enough that a borrower doesn't have to leave the house.
If the time has come for you to pick the best mortgage lender, while you might be tempted to go to the institution where you maintain your checking or savings accounts, stop to consider the personal service you may require. It's not how convenient the bank's location is to your home because you don't have to go into the bank to get a mortgage. It's not loyalty to the bank because you, dear reader, are one in a million accounts.
Mortgage lenders are extremely competitive, and they pretty much all offer the same ol' bag of money. Hands down, the number one criterion that will help you to pick the best mortgage lender is customer service. Find the mortgage lender that has the best reviews from satisfied customers.
Further, the one individual who is probably in the best position to offer you the best advice regarding how to pick the best mortgage lender is, believe it or not, your real estate agent.
Your real estate agent should possess first-hand knowledge of which mortgage lenders perform. Performance is utterly important in a real estate transaction. Most of the real estate transactions that cannot close on time are traced directly to the lender's inability to perform.
The best mortgage lenders are those who take personal responsibility for your loan. This means they:
- Communicate in a timely and prompt manner
- Deliver documents without delay
- Anticipate complications and take proactive steps to avoid those problems
- Oversee the loan application process thoroughly and competently
- Meet crucial deadlines
Almost every person in a service business today has online reviews. While many third-party websites will allow anyone to post a review, which means a reviewer could be bogus, a person with a vendetta or a troll, most of the reviews are from actual customers. You are looking for the mortgage lender with the highest level of customer satisfaction.
Mortgage lending is still a personalized business, much as some companies try to streamline the process. It's not just about the numbers. It is and always will be about happy customers.
3 Potential Drawbacks to Consider Before Picking the Best Mortgage Lender
Time Zone. While location or close proximity is not a requirement to pick the best mortgage lender, try to ensure your lender is located in at least the same time zone as you.
With crucial funding deadlines and tight time frames, it can be very difficult to close a home sale in California with a lender located in New York. It means a wire might not reach the closing agent in time if the cut-off time is, say, 11 am. Not to mention, if your mortgage lender calls it a day at 5 pm in New York and you are in Los Angeles, you can't reach that person after 2 pm.
Reputation. Many online lenders pride themselves on instant communication and fast turnarounds, but one obstacle they all tend to face is opposition from some listing agents. Especially if the situation warrants multiple offers and you are but one of many buyers vying for the same home. Understand the listing agent is likely to advise her seller to pick the best qualified buyer. A pre-approval letter, for example, from a local, well known and trusted mortgage lender is likely to carry more weight than an out-of-area lender.
A buyer should not be forced to lose her dream home simply because the listing agent is unfamiliar with a non-local mortgage lender, but it can and does happen.
Appraisals. The third potential drawback to consider before picking the best mortgage lender is to ask how the company will choose an appraiser. Will the appraiser possess extensive experience in the neighborhood where your property is located? Many borrowers have had bad experiences with the appraisal selection. You don't want an appraiser from another town trying to appraise your home in an area where the appraiser has little knowledge or experience. This can result in low appraisals, and nobody wants to deal with that setback, especially when it could have easily been avoided.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.