How to navigate choosing a lender in the most ethical way

Question

Hello Everyone!

I have just started my real estate venture and am currently looking for my first property.  Our agent recommended a lender she works with often who she has been adding to communications with local property listings.  However, of course we did our due diligence and shopped around some rates and found another lender that appears to be better.  Problem is we wont know exact numbers until we find a property.  How do we go about comparing the rates of the two lenders on a property we want to put an offer on?  I'm guessing we give each of them the numbers, have them generate us a rate and then just choose the best lender for that deal?

Thanks!

Jaron Walling · Answer

Ohh now that's a bigger difference. I guess it depends on your plan for the property but I went for a 3% down conventional. I planned for a live-in flip but now it's a rental! Sometimes the best plans change.

Drew Zervos · Answer

@Jaron Walling ok that makes sense.  I am more concerned with building a relationship but of course don't want to miss out on a %point on a $350K+ loan because of that.  I have pre-approvals from both and they have already both changed as you mentioned.  My biggest thing is one lender offers 3% down on a conventional whereas the other only goes as low as 5% down on a conventional and I'd like to use as much leverage as possible.

Jaron Walling · Answer

@Drew Zervos The rates change every week. I learned that the hard way on my first deal. Found it 4 months later and the leader refused to honor the rate. I ended up at 5% for an owner occupied SFH. I wouldn't worry about the rates so much because it's historically low anyways.

You'll need multiple pre-approval letters and credit checks if you try to compare rates. It's not worth it in my opinion. Building a relationship with the bank is more important. You want them on your side for future loans, HELOC, refinances, and business accounts. My advice is to try a local credit union or bank you already do business with.