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If your REALTOR® or builder make a suggestion for a lender,
be sure to talk to that lender. There are several reasons
they make recommendations.
One reason REALTORS® and builders make
suggestions is because they want to recommend someone reliable. Reliability
is important to you, so that you don't end up with a horror
story to tell. Reliability is also important to the
seller, the agents, and everyone involved in your transaction
because is the deal doesn't close, everyone walks away with
nothing.
When agents and builders recommend lenders, they often develop
a certain amount of "clout" in dealing with those
lenders. This can help in a situation where you need
to cut through "red tape" and get something done
quickly.
When buying a new home, dealing with a recommended lender
is often very important. This is because there are a
lot of intricacies involved in new homes that do not exist
when buying resale. If you "shop" around to
find your own lender, you may end up with someone who quotes
a great rate and is great with refinances or resales, but
has no experience with new homes. This can lead to problems
or delays.
Over the last ten years, real estate companies and builders
have built up their own mortgage brokerages. "Bundled
services" like this make sense because it adds another
profit center to the company. This is useful because
it helps real estate companies to offset higher commission
splits with their agents.
In the early days of "bundled services," the loan
officers and staff were often sub-par and the quality of
service may not have been so great. Things have improved
since then. However, because this is "captured
business," sometimes these lenders don't have as much
incentive to offer you great deals or lower rates. All
you have to do is let them know you are "shopping rates" and
they will probably work toward accommodating you as much
as possible.
Never automatically disqualify a recommended lender, but
be sure to be ask questions about any relationships between
the lending company and your builder or real estate agent's
company. That will help you be more vigilant on getting
the best interest rate and the lowest costs.
Make sure to do a little shopping for yourself. By
knowing the interest rates of the market and making sure
your loan officer knows you are looking at rates from other
institutions, you can use that as leverage to make sure
you are obtaining the best combination of service and lowest
rates.
 Things
You Need When Applying for a Mortgage
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copyright 2000 by Terry Light and
RealEstate ABC
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