The person on the phone said they wanted to buy a home and were approved for $750,000.00. I said, "that's great, what type of loan is it for?"
The caller was unaware of that "type of loan" it was. I followed up and asked what type of down payment did he and the lender discuss?
The caller said, "He said we did not talk about what I had as a down payment, the lender only asked what I may per year and what my payments were that I had going out each month."
I asked if the lender that he called actually asked for any of his financial information in writing? "Did the lender want to run your credit?"
The caller said that the lender told him that he'd run his credit after he found a home he wanted to buy and make an offer on.
I told the caller that I needed to break down a few things for them about the pre-approval process.
The Lender and Pre-approval process
The Lender - the entity that loans money to buy a home or any real estate.
The lenders typically consist of different flavors. Some are more nimble than others. Some are more "client" friendly than others.
Big Banks - apparently too big to fail!
Some real estate lenders are better known as banks. Most banks like Wells Fargo, Chase, and Bank of America have someone in their branch that can get someone a home loan or approve them to borrow money to buy a home.
The bank mortgage and home loan departments have their lenders that are willing to do things after hours, during holidays and on weekends.
Meaning, if you need to get a new pre-approval letter generated for a different amount than you are approved for, they can be there to do this on a Saturday night at 7 pm after you and your agent (us) have been looking at properties all day.
(there are so many strategies that we use to help our home buyers the best advantage - the "approval letter" amount being part of that strategy. If we are offering less than the approved amount for a home buyer, I don't want the home seller selling the "full approval" amount the buyer is qualified for. In some cases, home sellers may withhold certain credits or request for repairs requested buyer work during escrow if they see the home buyer can "afford" more than the home seller is selling their home for.)
Banks are good to work with - but there could be a source for home mortgage lending that is better. Allow me to continue.
Also, the only way to know if what you are being promised is to get it in writing, and then ask another "lender type" if they can beat those figures.
Don't skimp on service, professionalism, and reputation - This is a big, HOWEVER!
There are a lot of "businesses" that have a Credit Union that assists their "membership" with financial needs.
The Movie Industry has one, the Police Departments and Sheriff's Departments have them, Teachers and Military also have credit unions for their members.
Auto loans are typically better with the credit unions than at the deal, depending on course.
Auto loans on used vehicles or specialty vehicles are most times better than the dealer's resources.
Credit Unions are also pretty good at refinancing already existing home loans.
However, they aren't too reputable on a new loan on a home a member is buying. With credit unions, at least those my clients are working and have worked with, that is the feedback I get and pertains to my own personal experience.
Most credit union lenders (staff) are not available after hours, on weekends and during holidays. Some of the local Credit Unions my Police and Deputies work with don't even have a live person to speak with about getting pre-approved. The credit unions mandate their membership start the online application and a live person is not available but during business hours and they are overwhelmed, to say the least.
Another issue that I have found out to be the case is that if my client is wanting a strategic approach to an approval letter, to get a new one generated at a different amount - Good Luck. One particular credit union has the policy to have to re-run the officer's credit in order to re-issue additional approval letters at varying amounts. Reminds me of the slow-moving Washington DC politics.
Questions after hours - good luck. You are better off hiring one of those "referral services" that you see advertised on late night TV. Those lenders that are members of those advertisements are paying for your personal information so they can make money. Same in real estate - if you give up who you are while searching for real estate on a website that is not SCVNest.com or another qualified MLS connected website sanctioned by the Boards of Realtors, you are going to have your personal info and search habits sold to agents who are paying for leads from these websites.
What about the other intel? What if the home buyer wants to exceed the pre-approved amount? What if they have changed their minds about getting anywhere close to the pre-approved amount? Maybe they need to talk to someone about the payment, what will it be with their new plan?
Of course, in a perfect world, the home buyer would be able to get the answer in short order. (kind of like how we answer our clients :) )
There are a lot of decisions to be made when buying a home and most should be taken very slowly. It's a lot of money and a big investment. However, if you have decided, gotten approved, received the approval of those who help you make decisions, have answered the "where, when, why and how" questions and have been looking for the "right home" with us as your Top Performing real estate agents, time may be of the essence.
A controlled hurry is necessary within the real estate process. If you, as a real estate buyer, have been viewing properties for the past weeks with us as your Realtors, but at 7 am a listing enters the 'for sale' market that you simply must have, waiting may be a non-starter.
If you have been looking for a while, you may realize how "rare" listings of those type come onto the market. Knowing these things, you are going to want to be working with a real estate lender that is available to talk and that has a solid reputation within the mortgage and loan industry.
What type of lender can fulfill the aspects of a "Controlled Hurry" in real estate?
The Controlled Hurry real estate lender
Taking into account the home buyer knows the market, they have been looking at properties for a while with their trained real estate professional. And taking into account they know exactly what type of home they want, in the neighborhood they love and are on stand by - when that "one" enters the for sale market, they need to be ready to pounce.
Of course, this depends on the market as well. If the home buying market is way within a seller's market, they need to move fast. If the housing market is in a buyer's market, they may have all the time in the world to plan and pounce.
Unfortunately, homes sell in buyers markets too. The Days on Market time frames are important to know, but those are "averages" with homes selling quickly, shortly after they first enter the housing market and other homes selling with much longer times. It's impossible to say when you are going to want a home that is for sale that someone is also wanting, or when you want one when there will be no other interested home buyers.
The best resource I have found that is within the "controlled hurry" category when a real estate buyer needs an "attentive" lender to answer the "right" questions that the home buyer will have when placed within a "controlled hurry" scenario is the Mortgage Broker who is also a direct lender.
The Mortgage Broker for home buyers
I'm a realtor. I'm not a lender. However, I refer to the best Mortgage Brokers, Mainline Banks and Credit Unions that I know of.
Now is the time for me to talk about Mortgage Brokers in my latest Santa Clarita real estate blog article.
The Mortgage Broker is typically a local affiliation. A local venue that has a Real Estate license and who is a real estate lender with an NMLS, Nationwide Mortgage Licensing System credential.
They usually have "licensed" lenders working for them and also do origination themselves.
Origination means to make a new home loan on a real estate listing for a home buyer. Origination is a completely new loan for a home that is for sale. Versus a refinance - a refinance indicates a new loan on a home with the same existing "owners", not new owners.
You as a home buyer working with my SCVnest RE/MAX Team and I will be requiring a "new loan" for the home you are going to be buying.
Real estate mortgage brokers are probably the most nimble of any lenders you could find. They are willing to give up a large part of their personal and family life to attend to their client's needs.
The same goes for the Top Realtors that we know and is our very same credo. We are there for our clients period!
A mortgage broker will give you their cellular phone, their email, and their complete contact information. They do this so if you have questions you can ask and they are able to answer.
Most real estate lenders of the mortgage broker type are able to lend their investor's money or money that is their own to those wanting to buy real estate. They do this for home buyers and are very competitive with other "lenders" who they use to loan money to their real estate borrowers.
Most real estate lenders who are classified as Mortgage Brokers have access to over 150 sources of money to lend on homes that home buyers want to buy. However, typically there are only a handful of home lenders they like because they are the best performing and provide their home borrowers the best in fees and interest rates.
It has been my experience that home buyers that use local and well-known Mortgage Brokers have a home team advantage. Those other "top producing" real estate agents know which lenders do a good job and work hard to get the buyer what they want without causing the buyer's pain forcing them to want to cancel the transaction as a result of the lender actions or non-performance. So hence the referrals to the top Mortgage brokerages within The Santa Clarita Valley and elsewhere.
The local Mortgage Broker has a real office. A place where a home buyer who was happy or unhappy would be able to visit for a face to face experience. The virtual real estate lender is something that does not agree with most real estate buyers. They want to talk with someone at some point in person. They want to be able to read them and dissect their mannerisms with their non-verbal signals. They want to consider if that "lender" is someone they want to work with.
The same applies to my team and I. We have real brick and mortar offices. While most agents are "going virtual" meaning they don't have a real office at a real local location. They are in the "cloud". Those agents are meeting their clients at the first home their clients want to see for the first time, instead of sitting down in said agent's office to cover the A-Z of finer real estate buying strategies.
In my humble opinion, IMHO, real estate is too expensive a prospect and endeavor to not be able to visit with your real estate agent or lender within their very own offices. But, maybe I'm just old fashioned. Meeting at the local coffee house and discussing a clients personal financial status is also a bit strange to me.
However, it seems that, at least amongst real estate agents and brokerages, the virtual is a "thing" for the time being.
Mortgage brokers are willing to give up good faith estimates to their clients. Those whom we approve also make sure they provide "promises" in writing to our home buyers.
This is a very important thing for anyone to make sure to get from those "professionals" they are hiring for a service. Especially when those "hired professionals" are telling you how much things cost. Some say one thing and then you get another that is not anything like what you expected.
I'm Connor with HONOR and I want to be your Realtor. When you are ready all you have to do is call me and I'll be of the best assistance with your real estate needs.
And yes, I have real brick and mortar offices with REMAX Gateway. My main office is 25129 The Old Road, Suite 114, Santa Clarita CA 91381. Be Awesome and tell a friend.