Comparing Mortgage Companies (overview)

Unless you are willing to spend hours learning the detailed nuances of home financing, you may find that the main ingredient in choosing a Loan Officer and Mortgage Company is trust.  It’s a gut feeling that the Loan Officer and Mortgage Company are ready, willing and able to help you finance the most expensive thing you are likely to purchase, without taking advantage of you.

If a Realtor has referred you to a Loan Officer, the Loan Officer knows they have more at stake than just your transaction.  It is illegal for the Loan Officer to pay the Realtor for the referrals, so the Loan Officer must earn those referrals by providing customer satisfaction in order to receive future referrals.  If you are not happy, the Loan Officer has the risk of not only losing your business, but also loosing future referrals from the Realtor, and referrals are typically the lifeblood of that Loan Officer’s business.  If you call around to Mortgage Companies, the Loan Officer you talk to only has your particular transaction at risk if he does a poor job or overcharges, so you may not get the same quality of service.

The Loan Officer should take the time up front and ask questions to determine your financial goals and help you choose the mortgage that fits you best.  If you have options available, the Loan Officer should explain them to you in as much detail as needed in order for you to make an informed decision.  If a mortgage program sounds too good to be true, there is likely something you don’t understand yet, so keep asking questions.

If you want to take a more analytical approach, it’s best if you to understand all of the following areas:

• Interest rate
• Discount points
• Lender Fees
• Lender fees performed by outside service providers
• Title Charges
• Recording and transfer fees
• Items paid in advance (Pre-paids)
• Annual Percentage Rate (APR)
• Locking in the interest rate
• Closing the transaction as scheduled in the purchase agreement

I’ll help you analyze each of these areas in future posts.

Lou Auger,  Summit Mortgage –  Email – Website