The selection of a mortgage professional to guide you through the loan process is an important decision, especially when purchasing your first home.
In making any buying decision, it is important to do your research.
Here are a few critical questions to ask when trying to figure out how to select a loan officer:
#1 What is Your Availability as a Loan Officer?
When you are buying a home, you are typically going to review properties after work and on the weekends. It is extremely important to have financing presentations readily available for the property that you are considering before you actually look at the home.
The financing presentation needs to reflect the current interest rate for the program you have selected, the confirmed property tax rate and total assessments of the property, and any HOA fees if applicable. You will need this information quickly to determine if a property will meet your monthly and down payment objectives.
#2 What is Your Proactive Strategy to Get My Offer Accepted?
Much of Southern California and especially San Diego continues to experience a very competitive buyer’s market based on a lack of housing supply, especially for homes priced below $500k.
You need to be working with a lender who is not only available and responsive, but will structure a property specific, pre-approval package that represents your financial ability to perform on the transaction in a timely organized manner.
Your loan officer should advocate on your behalf with a personal introduction to the listing agent and follow up with your offer to purchase.
#3 Do You Have Any Special Expertise?
Are you seeking an investment property loan? Are you looking for minimum down payment, Jumbo loan, stated income, or a loan for self-employed borrowers?
You need to be working with a loan officer that has experience and connections dealing with these types of loans.
#4 How Long Have You Been The Mortgage Business as a Loan Officer?
Get an idea of who you are working with. Find out how long have they been working as a loan officer. What percentage of their business is refinancing versus purchase transactions?
How many loans did they close last year, last month?
It is important to research a loan officer’s actual closings, and a good resource is the Scotsman Guide, a third party that confirms closed mortgage volume of any loan officer who has closed over $50 million dollars in loans the previous year. The business of doing loans is very much based on transactions. A loan officer that completes more transactions has more experience and can proactively identify problems and mitigate them before they become challenges for their clients.
A loan officer that is participating in less than 10 transactions a month does not have the experience that you need to be confident in their services. It is also a good idea to review any Facebook or LinkedIn reviews. Ask for recent referrals of clients that have closed transactions with the loan officer in the last month.
#5 What Can You, as a Loan Officer, Guarantee Me?
In a purchase transaction, time is of the essence, and there are contractual obligations that must be met. To protect the seller’s time involved with the transaction, if these obligations or contingencies cannot be met, the buyer can be subject to per-diem fees.
In the worst-case scenario where a transaction cannot close, the buyer can lose the entirety of his or her initial deposit. Short of a job loss or tragedy, a loan officer has access to all of the information required to make a loan determination long before the standard 21-day cutoff to remove all loan contingencies.
Make sure that any loan officer that you work with will guarantee your earnest money deposit in the event of any preventable mistakes or miscalculations.
