June 28th, 2017 6:02 AM by Jackie A. Graves, President
Steering clear of homebuyer’s remorse
requires more than just picking the right home in the right neighborhood.
According to a 2016 survey by
J.D. Power, 27% of new homeowners ultimately came to regret
their choice of lender. One major reason for the dissatisfaction was overall
poor customer experience, including lack of communication and unmet
expectations. Another factor? Pressure from the lender to choose a particular
product or loan. You can remove some of the tension and turmoil of
house-hunting by carefully vetting potential lenders. Here are some questions
to ask potential lenders before you commit.
In many cases, choosing the best loan for
your specific financial situation requires working with a lender who offers a
wide array of loans. You don’t want to work with a lender who tries to push you
into one loan simply because that’s the only option from their limited
If the type of loan you’re looking for is
more specific than, say, a conventional fixed-rate mortgage, a little more
expertise is useful — and in some cases, it might be necessary. An uncommon home
loan like a United States Department of Agriculture loan,
for instance, must go through an approved lender.
Even when two lenders offer the same type of
loan, their minimum requirements could differ. For instance, Department of
Veterans Affairs loans require a minimum credit score of 620, but a lender might
require a minimum score of 640. So comparison-shop. Don’t assume
the same type of
loan means the same terms.
If you’re concerned about meeting down
payment requirements for a loan, this is an important
question to ask. Some lenders offer assistance programs. Putting more down
generally lowers your interest rate. Even paying just a half-percentage point
less in interest can make a huge difference in the lifetime costs of your
While an initial estimate doesn’t guarantee
your final, out-of-pocket expense, it can be a solid jumping-off point for
evaluating lenders. However, rates fluctuate, so try comparing lenders on the
same day to get the most accurate
mortgage rate comparisons.
If you’re house-hunting in a hot real estate market like Jacksonville,
FL, or a home for sale in
Colorado Springs, CO, time is of the essence. Make sure the
lender can quickly provide an in-depth preapproval letter to your real estate
agent. You want a preapproval letter that makes the seller confident you
qualify for the home — and, ideally, you want it to be delivered before
competing offers arrive.
Since a small change in rates can cost
thousands in the long run, check to see if the lender offers a mortgage rate
lock. Be sure to ask about the associated fees, including how
much it costs to extend the lock should it expire before closing.
There’s a big reason to ask this one. If the
loan underwriting is completed in-house, loans can be processed quicker and
questions answered more efficiently. And that means fewer potential
complications or delays that could push back a closing date – a situation that
can sometimes cause a sale to fall apart.
When you’re coordinating the end of a current
lease or timing a home sale with a new home purchase, knowing the estimated
time it will take to process your loan is key. Of course, it’s always a good
idea to build in a small buffer if you can — and not just because loan
preparation can take longer than expected. Surprises sometimes pop up during
walk-through before the home sells.
If your communication thus far hasn’t been
efficient and helpful, that could be a bad sign of things to come. Find out if
you’ll have a single contact who you can count on or just a general customer
By Kayla Albert
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