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When Realtors or Builders
Recommend a Lender
If your Realtor or builder make a suggestion for a lender, be
sure to talk to that lender. There are several reasons
they make recommendations.
One reason Realtors and builders make suggestions is because
they want to recommend someone reliable. Reliability is
important to you, so that you don't end up with a horror story
to tell. Reliability is also important to the seller, the
agents, and everyone involved in your transaction because is the
deal doesn't close, everyone walks away with nothing.
When agents and
builders recommend lenders, they often develop a certain amount
of "clout" in dealing with those lenders. This can help in
a situation where you need to cut through "red tape" and get
something done quickly.
When buying a new
home, dealing with a recommended lender is often very important.
This is because there are a lot of intricacies involved in new
homes that do not exist when buying resale. If you "shop"
around to find your own lender, you may end up with someone who
quotes a great rate and is great with refinances or resales, but
has no experience with new homes. This can lead to
problems or delays.
Over the last ten
years, real estate companies and builders have built up their
own mortgage brokerages. "Bundled services" like this make
sense because it adds another profit center to the company.
This is useful because it helps real estate companies to offset
higher commission splits with their agents.
In the early days
of "bundled services," the loan officers and staff were often
sub-par and the quality of service may not have been so great.
Things have improved since then. However, because this is
"captured business," sometimes these lenders don't have as much
incentive to offer you great deals or lower rates. All you
have to do is let them know you are "shopping rates" and they
will probably work toward accommodating you as much as possible.
Never
automatically disqualify a recommended lender, but be sure to be
ask questions about any relationships between the lending
company and your builder or real estate agent's company.
That will help you be more vigilant on getting the best interest
rate and the lowest costs.
CONCLUSION
Make sure to do a little shopping for
yourself. By knowing the interest rates of the market and making sure your loan
officer knows you are looking at rates from other institutions, you can use that as
leverage to make sure you are obtaining the best combination of service and
lowest rates.
copyright 2006 by Terry
Light and RealEstate ABC |
