It's no secret that today's lending atmosphere is much different than from years back. I've been seeing a few things things as of late that are a tad bit concerning. I'll get to that in a moment.
I wrote a post recently that outlined some basic things that the consumer can do to streamline the loan process and get to the closing table faster. Lenders are going through files with a fine tooth comb these days. In fact, they're scrutinizing loan files more than they ever have... at least in the seven years I've been at this gig. Here's a few things I'm seeing that are concerning and need to addressed:
Shopping up until the very last minute: I'd venture to assure you almost everybody wants the lowest interest rate and no fees. I will be writing a post in the near future of how us mortgage folks make our money. But, for purposes of simplicity, I'll save that subject for a different time. What I am seeing is folks who are shopping (and often times nickle and diming) lenders up until the last minute, and then when they make a decision... rates may have changed, product guidelines may have changed, and all the nickle and diming that was done actually costs you more. It may cost more in rate and/or may cost more in the product you're looking for even still being available. While everyone wants the best deal, that usually is attained by establishing quality relationships and a mutual sense of urgency to reach the common goal. My advice is don't be talking with ten different lenders, you're liable to get so much conflicting feedback and quotes that it will do nothing but confuse you and the whole process. Pick about three lenders who give you a good internal feeling. Make your one choice from there. The best choice won't necessarily be the lowest rate or fees, or the person that tells you what you want to hear. A quick example of this is my Homeowner's Insurance Agent. I guarantee he's not the cheapest in town but when I emailed him yesterday to call me, my phone rang two minutes later. That's service and that's why he's my guy. Shop with service and urgency in mind, as well as those dastardly rates and fees.
The 'hurry up and close' mentality: The line is ringing and I pick up and hear a frantic voice on the other end. "I need to close my loan in the next seven days, can you help me?" Hmmmm, that's just not the way it is these days folks. Believe me, we DO want to close your loan as fast as we can. Heck, we don't get paid unless we close loans. But give yourself and us some time, especially in this atmosphere. Underwriting turn-around times aren't as quick as we'd like right now, so get that mentality out of your head. Instead, know that it may take more time than it has in the past and work together as urgent as possible, to get to the magical world of the closing table.
You don't really need that documentation from me, do you? I don't ask for supporting documentation for health reasons. What is needed or asked for, is what I get. That gets the job done. One of the best ways to ensure that your loan closes in as timely of a manner as possible is to work with the same sense of urgency as we do. While I don't usually ask for skin graphs at the time of application, if that's what the lender wants to close the loan... I'll get it. Okay, I'm kidding on that one but I hope you get my drift. Delays in getting documentation will create delays in closing and in turn could adversely affect the very terms of the loan that you were initially quoted.
In a changing atmosphere, adaptation is key. Right now, all of us have to adapt. Knowing this and doing this will save a lot of frustration from all ends.
UPDATE! One of my favorite writers from the Mortgage Side of things must have been thinking along the same lines as me. Check out Janet's Post!
Jason Sardi, Pennsylvania Mortgage Broker
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Jason: this is an important post for consumers to read. The nickle and dime philosophy often fails and when they finally decide to "lock" a rate its already to late.It is a challenging time for mortgage Brokers as yourself.From what I have seen documentation needed from lenders is much tighter and consumers have to realize that it does take longer to get a full loan commitment these days.Thank you for the information.