How to find a good Mortgage Company
There are exceptions to every rule. When it comes to finding a reputable lender in your area, drawing from more than one source, along with careful comparison is key. However, you can improve your chance of finding a good mortgage company to work with by using caution in how you initiate the loan process. Here are some sources to focus on, and a few others to avoid.
SPAM - Email Offers - Without a doubt, this is the absolute worst way to find a mortgage company. In most cases, the companies sending these spams are not even lenders. They are lead generation companies that sell your personal information to the highest bidder. The real problem is that they don’t care who that bidder is. What worse is that they will generally sell your information over, and over, and over… The best you can expect from responding to spam is being bombarded by more spam. The worst you can expect in credit fraud. Don’t ever respond to mortgage spam.
Tele-marketers- Never-mind that it’s annoying, tele-marketers are usually a bad choice because they leverage the element of surprise. You see, this “sneak attack” keys on the premiss that the people they are calling have not initiated the mortgage process themselves. Because they know you haven’t shopped the competition, it’s easier for them to quote higher fees or rates. Of course the other downside to tele-marketers is that you don’t really have any idea who you are talking to. Lead Generation companies and Criminals looking to steal your credit identity commonly use the phone as a primary tool. If you do respond to a tele-marketer, ask to call them back before you give out any personal information.
Advertising - This includes TV, Radio, Yellow Pages, Web Sites, etc… finding a mortgage company in this manner is a mixed bag. The main advantage over the tele-marketers is that you now have the element of surprise. When you call a mortgage company, they know you are shopping, and more likely to be comparing several different companies. The knowledge of this forces them to quote more aggressive pricing and lower fees. The only problem is that you really don’t know if the promises they make are legitimate. When using these sources, shop several companies, throw out the worst, but also throw out the companies promising the moon.
Bloggers - The difference between a mortgage company with a web site and a mortgage company with a blog should not be overlooked. Professionals like David Porter have harnessed the power of the blog to show off there grasp of the industry. If you are lucky enough to have a dedicated local blogger like David, take the opportunity to read their blog a bit to find out more about the person you’re going to work with, sans a sales pitch.
Family & Friends Referrals - This is one of the best ways to find a good company. First off, your friend has first hand experience with that company. Second, the mortgage company values referrals more than just about any source. When a consumer comes in from a referral, they know they need to make sure the new client is just as happy as the old one. If the new client gets a raw deal, the original referrer is sure to find out about it and the lender will loose a chance at future referrals from both clients.
Realtor Referrals- I think this is the most important referral of all. As a lender, nobody is more important from a referral basis than a real estate agent. Many successful loan originators work almost exclusively with Realtors. Another advantage is that Realtors have a better idea of who is really better to work with than your family or friends. Mom and Dad may be happy to refer the guy who just refinanced them, but what if Mom & Dad didn’t realize they’d been suckered? Realtor’s on the other hand are more familiar with the market and know very well as to who is hot, and who is not. If you are doing a refinance, and don’t with to work with the company that did the original loan, asking a Realtor is often overlooked, but it’s still a good resource.
Once again, remember to shop, shop, shop. Make sure the companies you contact know you are shopping. Don’t feel like you have to commit that second, rates usually do not change drastically overnight. Most of all observe just how much detail a mortgage company inquires about in determining your situation, and the best solution for your needs.
July 6th, 2006 at 10:42 am
I think Family and Friends referrals is actually the best and most important referral of all. Granted, they could regrettably get suckered and not know it. However, Realtors are often pressured by their companies to refer their lenders, whether trustworthy or not. So, a Realtor with Re/MAX or Prudential would in some cases be obligated to recommend their in-house lender and other services above other local lenders, title insurance companies, and mortgage brokers.
We’ve had a few clients who went with an in-house lender, only to be promised a loan that couldn’t be delivered at the promised terms. The Realtor doesn’t always have control over the honesty and quality of their in-house loan officers.