Fair Play, Trust and the Mortgage Game
by Craig Goebbel
President & CEO, LoanTek, Inc.

Everyone has heard the stories. They get to the closing table and everything is different. The rate is higher, or the fees cost more. Sometimes, the loan program is totally different. As lenders, we cringe when we hear these stories. A bad experience for the consumer is a black eye for our industry. The vast majority of us take great pride in providing good service at a fair price so our client completes their transaction happy.

Must the Buyer Beware?

Absolutely! First, a mortgage will likely be the largest single financial transaction you undertake. Second, rates, fees and programs vary among lenders.

Here is how to play the game. First, comparison shop. It is easy since lenders are required by law to disclose all fees associated with their transaction in writing (Good Faith Estimate) and to provide detailed loan disclosures that describe the terms or the mortgage. Second, always let common sense prevail and never take a short cut on the due diligence you must perform when shopping. Third, never sign anything you do not understand. Last, get a copy of everything you signed.

After your due diligence you will be able to determine which offers are the most appealing to you. It is quite common to have several offers that are very similar, almost identical. This is where you follow the “rule of same.” Make certain each loan proposal is for the same loan balance, the same term, the same rate, the same lock period and done on the same day. Then all you have to do is eliminate the charges for “per diem” or daily interest and any required deposits for taxes and insurance. Once you have deducted these fees the lender who offers the lowest cost is the best deal on paper. It is at this juncture you must make a decision about who earns your business. If one lender stands out and you were not referred, them ask them to provide some references. If a couple of lenders are too close to call then trust your instincts and choose the lender you found it easiest to talk with.

Your relationship with your lender, however brief is not unlike the doctor patient relationship. You need to trust them to do what is in your best interest. You must be willing to tell them all they need to know, not mislead them and have readily available all of the documentation you said you could provide.

Trust is a Two-Way Street

Ok, you have done your due-diligence and chosen a lender. It is now your obligation to provide all the documentation requested. Once the documentation is in, full credit approval should be a few hours or at most a few days away.

Just as you take time and effort to choose your lender, your lender spends a great deal of time and resources putting your transaction together. Often, they do all of this on faith, without any up front deposit. Your lender trusts that if you reach an agreement on terms and they perform as agreed then you will follow through and close the transaction. Lenders don’t earn their fees until the transaction closes.

So switching lenders at the last minute without giving your lender an opportunity hear your concerns and make you happy is no way to play the game.

© 1999 - 2004 LoanTek

Craig Goebbel is President and CEO of LoanTek.com, mortgage loan brokerage.  He is also producer and host of Real Estate Radio Show, a Seattle-based talk show featuring mortgage and real estate news, interviews and listener calls. It is broadcast on KVI Radio AM 570 in Seattle, Washington. Past show are also webcast via the Internet at http://www.realestateradio.net.

Real Estate Radio Sponsor

Real Estate Radio with Goebbel and Gray is the leading real estate radio talk show in the world and is hosted by Real Estate home mortgage expert Craig Goebbel, owner of LoanTek Home Loans and Robb Gray of John L. Scott Real Estate.