What the Fed thinks about Shopping for a Mortgage Part 1
Posted by: Greg Fischer Post date: September 23rd, 2009When shopping for a mortgage, there are a number of pitfalls and mistakes people often make, simply because they don’t understand all the complexities of the process. According to the Summary of Findings: Designing and Testing of Truth in Lending Disclosures from 7/16/09:
Only about half of research participants consulted more than one lender or broker
when looking for a mortgage loan. The two most common reasons that participants did not
shop more actively were a) because they trusted a particular lender or broker due to a
personal relationship or prior business relationship; and b) because they were referred to a
particular lender (e.g., by a real estate agent or home builder) and did not think to consult
others.
Now as a mortgage broker, I want to be the LAST person you call. Since every lender in America has a “Low Rate Guarantee” the next person you speak with will probably tell you whatever you need to hear in order to win the business. Now, whether or not they can deliver that is another story. New regulations have made it far more difficult to bait and switch a borrower – but not impossible.
This is especially true when shopping for a refinance. Since most lenders will not lock a rate without a complete application (and question anyone who does), they can quote you anything based on a rate that you aren’t guaranteed to get anyway.
Lying with numbers is easy to do for a loan originator who is willing to do so. Of course rate and fees are important to you and your new loan. But that should not be the end of the discussion. Ask questions of your mortgage professional. Get personal. Know who you are dealing with.
Focus on CRISP:
Commuinication
Rate
Integrity
Smooth Process
These are the factors that make a mortgage transaction a success. Know what to expect before you sign the paperwork, and eliminate that much frustration right up front.
