One of the most asked questions we get in regards to the Real Estate process pertains to lenders and mortgage companies.Are they all the same? Is one better than another? Does one give
Mortgage company myths!
Dated: October 26 2020
One of the most asked questions we get in regards to the Real Estate process pertains to lenders and mortgage companies.
Are they all the same? Is one better than another? Does one give better rates, programs, fees, etc? Could a particular lender have an impact on an offer being accepted for a buyer, or by the seller? The answer is NO - they are not the same and YES, it can have a major impact on your offer!
Confused by seeing ads on TV that seem too good to be true? Think that widely known companies on TV have the best rates and fees? Below we will discuss some common myths to help you during your sale and purchase process.
Generally speaking, most lenders have similar loan programs and offer similar interest rates. The lending industry is very competitive and rates change throughout the day. When it comes time for you to compare lenders, one suggestion is to have each lender quote you an interest rate at the same time so you can efficiently see if one is lower than another. Rate, though, is just one small component that factors into which company to work with. The second area of comparison are your fees associated with getting a loan. We've seen lenders have THOUSANDS of dollars in fees that can often be avoided to get the same rate as another company. Remember those widely advertised companies on TV? Who do you think is paying for all that advertising? The answer is - YOU!
Many ask us why this matters? Isn't a mortgage a mortgage? NO! There are different mortgage types, whether it be Conventional, FHA, VA, MSHDA, Rural, FHA 203k, etc. The type of loan you have, the amount of money you put down, whom the lender is, what your deposit is all have impact on whether your offer will be selected by a seller. This is especially important in a Multiple offer situation.
We believe the best lender to select from is the one that you feel most comfortable with. If you are unsure, ask your Realtor who they recommend for a referral. Your Realtor has already weeded out from hundreds of lenders over the years a select few that give excellent customer service and great rates and fees. As a general rule, local lenders are more accessible than someone who is out of state or online. We find many banks to be less flexible in loan programs available than local mortgage brokers. Local lenders also often have niche (portfolio) programs available to buyers with financing programs that may not conform to mainstream programs.
We want your offer to be in the prime position to be selected when you love a house enough to offer on it. Having a pre-approval from a company may not ensure your offer will be chosen, but it can certainly ensure you are not chosen. Lastly, don't believe a certain TV ad that getting an approval from them enables you to compete with cash - that is just simply not the case!
Cheers to good lenders and great offers!
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