This topic is extremely important because many people set out to comparison shop for mortgage financing without a well designed strategy. For starters, a borrower needs to create a level playing field. If you set out to shop among four Loan Representatives (LR), then make sure that all four have the same information, specifically a full application, appropriate documentation, and your credit report. It seems that many people will intend to see what's out there, but after speaking to one LR they will convince themselves that they are taken care of and “working with someone”. Now, if you have a trusted mortgage advisor that has your undying allegiance then I congratulate you. But most people do not have that kind of relationship and chances are that if you did you would not be reading this report.
To continue, many times you may speak to that first LR, who promises (verbally) a very attractive low rate, and makes a good enough first impression. So you might provide your information for an application and consent to have your credit pulled. Very often the LR will warn you not to have your credit pulled again because the scores will drop. This is just not true, but that is not the main point of this section. What happens all too often is that the applicant is reasonably comfortable with that first LR, becomes complacent, and does not stick to the original plan to shop around. I am not suggesting you should speak to 10 LR's, but speaking to more than one and commanding that they compete on a high level (as detailed in other reports in this series) can only help you get a suitable deal that serves your best interests. So this applicant has now committed two big mistakes which can often lead to getting ripped off. This applicant has:
1) created an un-level playing field
2) put all his/her eggs in one basket
What should the applicant have done instead?
1) give the application, documentation, and credit report to more than one LR
2) do some homework and thereby control the process
3) ask good questions and demand straight answers
4) “get it in writing”
5) understand the process and what to anticipate
All of these things are crucial, and we also need to examine the way many people “rate shop”. Way too many people think that the way to get the best deal is to speak to a number of LR's, asking “what's your rate?”, and request a Good Faith Estimate (GFE). The fact is, there is no way to accurately and reputably answer that question without knowing something about each individual borrower. If the LR blurts out a rate you should run the other way. Also, when you see or hear advertisements that seem to good to be true, they are just that. Predatory lending starts with false advertising, which is rampant. Don't succumb to wishful thinking. But all too often, borrowers listen to the siren song. Understand this, the “best” rate and the lowest rate are not the same thing. When you get qualified for a mortgage you are determining the highest payment you can handle, which does not entail the lowest available rate. And, the “best” rate is actually the highest rate that an LR can propose to you that you might agree to. I shed more light on this issue in another article, titled "How Loan Representatives Get Paid".
A borrower must understand the following regarding shopping rates and Good Faith Estimates. The lending industry is poorly monitored, so LR behavior very often does not adhere to regulations, verbal rate quotes mean absolutely nothing, and even GFE's (which are not standardized or enforced), are largely misleading and non-binding. In light of this, if you believe you are covered when you request a rate quote and GFE, you are sadly mistaken. Perhaps ironically, you may actually be creating the opportunity for an unethical LR to take advantage of you.
In another report focusing on "Understanding The Mortgage Process", I detail the method of how to truly determine your rate, fees, etc., before you spend a penny or commit yourself in any way. Shopping for suitable financing is not difficult, if you know how to go about it. The process requires organization and attention to detail, but does not have to be complicated. It just has to be done the right way. You need to have the playbook so you can apply the correct strategy and find a good LR who will get you the deal you deserve. Good defense is your best offense and will save you money. Please enjoy any of the other free reports in the series by visiting my web site, and I would be pleased to offer you a complimentary, no-obligation consultation to answer any questions or help you secure suitable financing that serves your best interests.
E-mail me, call the Toll Free #, or go to the web site if you would like more information. Thank You.
Bob Freedman is a Mortgage Banker with Ascent Home Loans, a Colorado-based corporation. Bob is also a licensed Florida Mortgage Broker, #447518.
http://www.ascenthomeloans.com/rfreedman
Senior Mortgage Banker
Florida Mortgage Broker #447518
Toll Free: (888)551-5897
http://www.bobfreedmanmortgage.com
Article Source: http://EzineArticles.com/?expert=Bob_Freedman
No comments:
Post a Comment