What do you look for when looking for lenders?

Question

Hey guys, I’m currently in the process of getting pre approved with a lender that I’ve been working with and in contact with for a couple months now. I’m just wondering if I should look around for more lenders?? And also, what do you look for in a lender that separates them from others. Thank you!!

Marco G. · Answer

@Karl Teshima

What are you trying to buy? If this is an agency loan, meaning for a 1-4 unit and in the hundreds of thousands, then loan costs and rate should be what matters. I have had success with a few Internet based-lenders. Always remember, the person you’re taking to is not the one deciding to lend. They just get the paperwork from you. Underwriting is where the decisions are made.

Exception is if you’re at a local bank and developing a relationship and they are keeping the loans on their books. Otherwise, rate and costs is all that matters.

And if you go through underwriting and get pre approval, just ask what is the DTI. If you’re under 40 you’ll get approved anywhere if your income is w-2. I’d prefer to be pre approved with lender to speed up loan processing but not a requirement you borrow with same bank that have you pre approval.

Good luck.

Frank Teshima · Answer

@Brad Hammond thank for the help!! I really appreciate it!

Brad Hammond · Answer

I don't know if I would assume they will be more responsive when you are under contract.  I understand your thought process but it is hard to say if they will get better or not.  If you find one that is responsive at your stage now, even better.

You will want to get pre-approved before you start putting offers in.  The sellers won't take your offer seriously unless you have a pre-approval to prove you are a qualified buyer.  You can be pre-approved with as many lenders as you like.

Matthew Crivelli · Answer

@Karl Teshima When you hear yes yes yes and then all of a sudden it's a no also when they don't pick up the phone when you need them.

Frank Teshima · Answer

And thank you @Matthew Crivelli !! I totally agree with what your saying, what are some experiences you’ve had with lenders, that made you not want to work with them again?

Frank Teshima · Answer

@Brad Hammond thanks for the help! My lendor is everything, except responsive, but I feel like I need to earn my spot on his “list”, so that when I contact him, he’s on it. And a second thing, so since I’m getting pre approved with my lendor now, do I have to get pre approved with other lenders that I feel that I like? Or do I just wait till I put a house under contract, and then take the deal to them and see who would give me the best deal?

Brad Hammond · Answer

Hey @Karl Teshima, for lenders you want to work with one that is responsive, you work well with, has great rates, and low cost of the loan.  I would shop around and take your best offer to other lenders and see if they can meet it or beat it.  Also, it is better if it is a local lender that you can reach after hours and on weekends.  There will be issues that arise and you will need to get ahold of them.

Matthew Crivelli · Answer

I think if you found a good lender who you like you should stick with them. Just because someone has the best rate doesn't mean they have the best service. As you move along your real estate journey you are going to find that service beats out price in most cases.