Happy Wednesday! I hope you are doing well and staying safe. For this week’s video I want to talk about questions to ask when choosing your lender. In this market, the lender you are working with has a big impact on whether your offer gets accepted. We are getting referred a lot of clients that were working with other lenders and not getting their offers accepted and we have been able to help many of them come up with a strategy to win in this market. Please see below and watch my video for more details.
•Are they local? This makes a huge difference right now because listing agents and sellers usually don’t want to work with online lenders, out of state lenders, banks or credit unions.
•Are their rates/lender fees competitive? In this market, most rates and fees should be similar from reputable companies, but we are seeing a lot of online lenders quote rates that are below market but not sending out an estimate that shows the loan charges. Rate is important but you also have to compare the loan origination fees associated with the rate. We had a client recently that was getting quoted a rate that was .375% below the market. I asked the client to get a loan estimate and once he did, he realized they were charging $21k (yes $21,000) to get that rate.
•What is the max you can qualify for based on the cash to close and payment you are comfortable with? In this market, once you determine your max you should look at properties that are $25k - $50k below because most properties are selling above list price. This is very important because if $400k is your max and you look at $400k homes then you are going to feel like you keep losing offers because you are looking at the wrong home.
•How quickly can they close?
•Can they do a full pre-approval so you can waive the financing contingency?
•How quickly can they get the appraisal back?
•Are they working with a local appraisal panel?
•What options do they have from a mortgage perspective if the home doesn’t appraise? •Will they call the listing agent for you when you make an offer?