Lender Search - Things to ask / look for
Hi BP!
I am beginning my lender search. I have talked with a few agents and gotten recommendations for lenders in my area. One of the first things the lenders try to do when opening conversation is trying to get me to fill out their online forms to underwrite. I was wondering what things I should ask the lenders or look for before I start filling out approval forms. I obviously think that I should decide on a lender or two before filling these out as I don't want to many credit checks against my name. So, was wondering what screening questions to ask them or red flags to look out for.
Thanks for the help!
Well be open and honest if you have a unique situation, I have learned if you confront them first it can save you lots of time if they cant work with you. Also, a few red flags are if the ask for money upfront (typically scammers), If they only try to sell to you (everyone should value the relationship), or if they have no references. One thing that is pretty normal is them trying to pre-qualify you first. Coming from an agent perspective us real estate vendors often get screwed because we spend a lot of time working for our clients then find out they couldn't qualify all along, so the initial qualification helps us not waste our time.
Hi Josh! I am a lender in the St. Louis area so I'd be more than happy to chat. To answer your question, I would ask the following questions when looking for your lender.
- What are current rates and what fees will apply? Typically, if the rate sounds too good to be true, there's a pretty hefty fee.
- As Brett mentioned, let them know up front what your financial position is and what you're looking for as this will allow them to get a better idea if they're a good fit for you.
- Set up a meeting in person prior to filling out your application. A lot of people find lenders online and once the loan is closed, it's extremely difficult to get ahold of the company. Setting up a meeting will allow you to better understand the lender and how the company will handle your loan moving forward. You don't have to set up a meeting but at least a phone call to make sure you're working with an actual person would suffice.
-Credit pulls impact your credit but, if you have a solid credit history, 2 or 3 pulls shouldn't make or break your deal.
-On average, how long does it take to receive a pre-approval and final approval? The last thing you want to do is chase a good rate but get stuck with a long approval process. Hopefully they're upfront and honest about turn times.
Hopefully those tips are helpful for you!
Quote from @Whitney Gillette:Great information !
Hi Josh! I am a lender in the St. Louis area so I'd be more than happy to chat. To answer your question, I would ask the following questions when looking for your lender.
- What are current rates and what fees will apply? Typically, if the rate sounds too good to be true, there's a pretty hefty fee.
- As Brett mentioned, let them know up front what your financial position is and what you're looking for as this will allow them to get a better idea if they're a good fit for you.
- Set up a meeting in person prior to filling out your application. A lot of people find lenders online and once the loan is closed, it's extremely difficult to get ahold of the company. Setting up a meeting will allow you to better understand the lender and how the company will handle your loan moving forward. You don't have to set up a meeting but at least a phone call to make sure you're working with an actual person would suffice.
-Credit pulls impact your credit but, if you have a solid credit history, 2 or 3 pulls shouldn't make or break your deal.
-On average, how long does it take to receive a pre-approval and final approval? The last thing you want to do is chase a good rate but get stuck with a long approval process. Hopefully they're upfront and honest about turn times.
Hopefully those tips are helpful for you!
You provide on the phone:
My status and who is going to be co-borrower relationship
Intended vesting (how you want to hold title)
Location/city/ property type/ units/ general value/ sales price
Condition of property: needs roof/turn key
How much money you want to put down and how much money in checking/savings
What is your FICO score (you don't let them pull credit or give your social you generally know what your credit is like)
Your goals, time frame, experience, where your job location is, can you work remote in future 3 years-- job location type
A good lender gets a picture of what you need and gives you on the phone generally what
your rate will be, how much cash you need, and what various programs they have to fit your needs - or they refer you
to someone who is a fit. They will follow up with written quote and needs/homework list.
Keep good notes. Ask about their experience and license. You want someone who has been doing loans more than seven years. See if their style of communication fits yours. For example I answer my phone 7 - 7 Pacific and email every day during the transaction. If you are not an email opener, we come up with a plan that communication is fast and direct daily. Sometimes a borrower assigns a point person to do this. You need to read everything and ask for explanations of anything that you do not understand.
@Josh Kliethermes- thanks - good move as far as getting loan pre approval in place as one of ypur first steps ....contact several lenders on the SAME day and ask them any questions you have and then provide them with same criteria / scenario and ask for some quotes for what you are considering ....dont allow any credit reports to be pulled at this point ....ask them to email/ text you their feedback / proposals .....review the data you recieve and the quality of conversations you had and make a decsion on picking one lender to get the loan pre approval in place with ....keep in mind that you cant lock into any loan rate/ fee until you have a purchase contract and also be aware rates change daily - good luck