Seek a Local Mortgage Professional When Financing A Home
This insightful article showcases some of the many reasons to use a local mortgage professional (with an excellent reputation) when financing a home. There are many potential pitfalls a homeowner/homebuyer may encounter while securing financing. A seasoned & trusted advisor can seamlessly guide you throughout the process, ensuring you don’t fall victim to any of the pitfalls. Enjoy the read!
via Wall Street Journal
Facing a Bidding War? Why a Local Mortgage Lender May Offer an Edge
Home purchasers seeking to stand out in competitive housing markets should consider a mortgage professional based in the area
ILLUSTRATION: CHRIS GASH
By Leigh Kamping-Carder
Don’t discount the benefits of shopping local—even for a mortgage professional.
In tight housing markets where bidding wars are common, buyers who need financing can strengthen their offers by working with a locally based mortgage broker or loan officer, real-estate agents and lenders say. “Getting a local person helps you over certain humps—it just really does,” said Andrea Gordon, a real-estate agent at Red Oak Realty , who works in Oakland and Berkeley, Calif., and keeps a list of trusted mortgage pros on her website.
Agents want to work with buyers whose lenders know the local market and have a record of getting deals done. That reassures the listing agent and the seller that a sale will close. In markets like San Francisco, Seattle and Boston, where buyers frequently go up against multiple offers and all-cash bids, confidence that a sale will happen can separate a winning bid from the rest.
‘In housing markets where bidding wars are common, buyers who need financing can strengthen their offers by working with a locally based mortgage broker or loan officer.’
Online lenders can offer convenience, and it is still useful for borrowers to shop around for the best rates and terms. But lenders in hot markets caution that a small difference in rates isn’t the most decisive factor in choosing a lender. “Ability to close is even more important,” said Alber Saleh, a sales manager at Wells Fargo Private Mortgage Banking in Corte Madera, Calif., near San Francisco.
Reputation matters. “Finding someone you can do business with, communicate with and enjoy speaking with, is also important,” said Tim Manni, a mortgage expert with NerdWallet, a San Francisco-based personal-finance company.
Another factor is speed: Often sellers fielding multiple offers will choose the buyer who can close quickly, making it difficult for buyers who need the typical 30- to 45-day window to get a loan. Mortgage lenders in fast-paced markets are tuned to quicker closings.
Stuart Davis, an Oakland, Calif.-based senior loan officer and branch manager at Movement Mortgage, who focuses on loans in the area, said his firm aims to arrange loans in 15 to 18 days—a duration that he said is competitive with the typical 10- to 14-day closing for an all-cash deal. Mr. Saleh said that he offers a 21-day close on almost every transaction. Some lenders will also underwrite buyers—essentially offering a full credit approval, rather than just a preapproval—before the offer.
Working with a mortgage professional who has an existing relationship with a buyer’s agent also tends to mean more personal contact, and the ability to get questions answered promptly. “You can send this person a text message at 9 o’clock at night,” Mr. Manni said.
- See Double Ms. Gordon said she sometimes advises borrowers to “double-app”—that is, to apply for a mortgage from the lender with the best rates and from the lender with the local relationships. The latter provides the additional security of getting a loan quickly, and may be able to match the other firm’s rates.
- Vet Your Cousin “Just because your cousin does loans doesn’t mean that your cousin is a good loan officer,” Mr. Davis said. If you want to work with someone you know personally or someone from your bank, have them speak with your agent first, and reassure them of their reputation and relevant experience, Ms. Gordon said. “I’m going to try to find out—if I don’t know them—if they have the chops, basically,” she added. The buyer’s agent can then communicate their bona fides to the listing agent.
- Shop Around You don’t have to work with the local person your agent suggests, Mr. Manni said. Compare rates and terms among local lenders.
- Home(town) Appraisal Even if you work with a national firm, it is important to make sure the company uses local appraisers who know the difference in value between Manhattan’s Central Park West and Columbus Avenue a block away. That is especially true when a bidding war might mean the property sells for a significant premium over the asking price.