All of a sudden (about the last 5 deals I have been a part of) the lenders are starting to really muck up the process lately. Not really sure what is happening. All the deals closed in spite of the lender but if it wasn’t for the real estate agents working way above and beyond the call of duty these deals would have been dead about 15 days in.
There is one lender I am working with right now. The reason I am telling you this is because it is important to work with a local lender. You don’t need to use the person your real estate agent recommends but if they recommend there is usually a history and they know that lender can perform and get the job done. If you don’t use who they suggest at least use a lender that is in the area. Just google it find out. It is also usually better to go with a mortgage broker as they can shop around for the best rate for your current situation.
There are a few things to remember when buying your home. When it comes to sellers it hard for them to separate the buyer and the lender. If things start screwing up and extensions to dates and deadlines need to be made they don’t care who’s fault it is. They are just going to blame the buyer since it is the buyer’s side of the transaction holding things up. There is a mandatory 3 day review of the disclosures right before close. So sometimes the lender (this is happening on one of my deals right now and is the inspiration for this blog post) and the disclosures don’t get out until too late. This means that this lender just forced closing to be pushed back due to federal regulations.
Now when this happens there is a domino effect. SO at this point if closing was scheduled on a Thursday or Friday this pushes things way back. Now the seller needs to rearrange moving, utility shut off and transfer, closing on the home they are buying, meaning sellers of the home they are buying need to go through the same adjustments. All this because a lender doesn’t properly do their job. There can be a lot people having a bad day or week because of a lender.
Of course there are things beyond the control of the lender. Perhaps an underwriter is having a bad day and 4 days before closing he decides he wants the buyers last month’s CC statement that doesn’t publish on his account until tomorrow. Things like that can happen. There are certain things that are unavoidable but that is why it so important to find a lender that is the best.
Another reason a lender that is actually a broker is a good idea is because he isn’t just an employee collecting a paycheck. A broker only makes money if the loan goes through. This is also why you will be able to reach that mortgage broker on Saturday or Sunday for a lender approval letter. The other guys, not so much. They punch out at 5 on Friday and return calls at 9AM Monday and hopefully you didn’t miss out on your dream home because you didn’t have a pre qual letter.
The moral of this story is find a local lender that your real estate agent knows. It is just as important for the deal to go through especially in a seller’s market. If lender drags their feet at all it is a possibility the deal could be in jeopardy. Who people use for lending is one of the strong points of the contract. If their are competing offers and the offers are pretty similar and one is using the First Internet Bank of Prussia and the other deal is using a lender the listing broker has used before because he is down the street, the listing agent is going to pass the information on to the sellers. After all it is the listing brokers job to assure the goes through on the time it is supposed to.