A4HB Homebuyer's Blog

Begin by getting specific recommendations not just for mortgage lenders, but also for a specific loan officer. Talk with family members or co-workers or with a real estate broker who you have some level of confidence in. The latter is probably your best source. Real estate brokers have repeated experience with many loan officers. They know which ones know what they’re doing and do a good job time after time. While your interests and that of your real estate broker may be at odds in many contexts, you both have a vested interest in your working with a first rate

Ok. If you need to start by sitting down with a good loan officer and talking through your situation, how do you decide who to sit down with? It’s a good question, and like most good questions, there is no easy answer. But here are some thoughts. Knowledge and Experience. There are a myriad of loan types and loan programs, all with strengths and weaknesses and all with their own rules and restrictions, and all of this is constantly changing. Matching this fluctuating universe with your situation and your needs is not simple. Further, as you work through the purchase

Many buyers, even experienced buyers, try to use loan rates and loan costs as the basis for this decision. After all, if you’re borrowing money, you naturally want the lowest possible interest rate and you want to keep the fees for obtaining your loan to a minimum. It just makes sense to call around and find the lender with the cheapest rates and the lowest costs, and then set up a meeting with one of their loan officers. While this strategy would seem very difficult to fault, it actually makes almost no sense at all. Some key points:   Committing

When you meet with a loan officer to review your options, you need to understand their role in the system. They are not the gatekeepers to the bank vault. Their job is not to keep you from getting the bank’s money, but to find a way to make you a loan. With very few exceptions, lenders are not loaning their own money. They are loaning money that comes from other funding sources including governmental, quasi-governmental, and private organizations. There are no limits in the funds available for lending. If your loan officer could originate a billion dollars in loans each

A good loan officer knows more than three or four basic loan options, or how to calculate the loan amount you can qualify for, or what to put in the blanks of a loan application. They’ve spent years studying the multitude of loan options that are available on the market. They’ve also spent years matching loans to buyers, considering issues such as the buyer’s risk tolerances, their credit and employment history, or their plans for how long they are likely keep the property or the loan. A good loan officer will know whether you are likely to run into problems

With respect to the general issue of loan types, lenders, and interest rates, there is a virtual ocean of information on the web. Begin with our section on Loans and Financing, but another good source is HSH Associate’s site. Both describe the many types of loans that are available, how loans are priced, how your credit influences the types of loans you qualify for, and what current interest rates are like. They also provide mortgage calculators to help you get a feel for what you may be able to borrow as well as information on current loan rates. However, one

Our goal here is to help you understand who’s involved in the process of helping you get a loan to make your home purchase possible. We’ve outlined broader issues involved loan types and the process of obtaining a loan in our section called Loans and Financing. In principle, you can obtain a mortgage loan from an individual. I’ve had clients who’ve received their mortgage loan from a family member or a family trust. In this situation, a single individual may set the rules for your loan, talk them through with you, make the final decision regarding whether to make the