Good morning all: I was thinking on my drive home last night about how ingrained it is in our borrower's mind that they get the lowest rates and fees on their loan. Granted this isn't a bad thing. In fact, I often encourage people to call 2 or 3 lenders when shopping for their loan.
With this in mind, I can't stress enough how important it is to compare the same with the same. Right now I'm working on a jumbo loan (over $1 million) for a borrower whom I have known for a while. I was not discouraged when they decided to shop around. What is maddening is the rate and fee quote they got from one of my competitors. A Good Faith Estimate was sent that not only charged them a great rate but also had $3,000 in closing costs as a part of the loan. if you do your math, and include everyday legitimate charges such as title insurance, escrow fees, etc., there's virtually nothing left for the company originating the loan. Furthermore, the property tax and hazard insurance information was woefully low. And this quote (I won't name names) was from a big-name lender!
Loan officers: If you're going to quote a borrower, do your homework. Do not throw a Good Faith Estimate out there that is inaccurate. It does the rest of us a disservice. It makes us look unprofessional and the borrower probably won't do business with you again. Borrowers: If you're going to shop for the best rate, make sure you give every bit of information you can to the loan officer. In my case, the borrower called the lender, gave them their high credit score (not the mid-score which is the one almost all lenders use) and got the quote. When I called back to check on the quote with the accurate credit score, the rate was much higher due to the borrower's lower credit score. Another thing is there can be significant interest rate adds for larger loans. In other words, again do your due diligence.
In closing, go with someone you can trust. A real estate transaction is a large one. There's a lot of communication that needs to be done to get a loan done. If you're not being communicated with often during your loan, your loan officer is not doing their job. Have a nice weekend!
Paul
Paul McFadden
Thanks, Larry. Have an awesome day!
Paul
I try and make sure my clients use a lender in the Area. That way they can compare apples to apples. Some want to shop the whole country, but offers are always to different.
J.
Rated this post a "5"!
Not only am I tired of other brokers/lenders misquoting borrowers, I'm also tired of the advertisements for 30 year fixed rates @ 5.5% with no points! The average borrower doesn't want to talk to you until they've been through the process with another company, where they get the ol' bait and switch!
Thanks, Jeff. That's good, sound advice. As it turns out, i didn't get the loan but am o.k. with it. Sometimes borrowers come to their senses after all! Take care.
Thanks, Gareth. I believe if we're on the up and up, more often than not we'll get these deals. if we don't, we move on ande hope and pray that the borrower doesn't get hosed! Have a great day!
Paul