Wednesday, February 21, 2007
How to Pick the Wrong Lender
One day, youre interested in getting a loan. Your program is simple: Call a number of lenders and see who have the lowest rate. You name the first lender. He inquires you when you be after on getting your loan. You state him in a couple of months. He gives you a low rate quote. And, after a number of calls, you happen the first lender you called have the lowest rate. When the clip comes, you cognize whom youll use.
Now fast forward a few months. You name the first lender. His rate is a spot higher than the last clip you spoke with him. He states you that the rates have got gone up a bit. He even asks for you to check around. Why make that? After all, he had the lowest rate quote when you did your first rate search. You get your loan and all is well, right?
Wrong! This lender used a fast one that have go a dark portion of the mortgage business. You see, the first lender you called knew you wouldnt be getting your loan for a couple of months, so he quoted you a rate well below what is feasibly available to you. After you checked around, you discovered his quote was the best. Surprise! You KNOW he have the lowest rates because he had the lowest rate quote the last clip you called him. This technique is actually taught by unscrupulous trainers and is, in my opinion, shameful!
Heres another trick:
You name a lender, get a rate quote, even ran into with him and complete a loan application with the rate he quoted shown in your package. Time travels by, your loan procedure goes on and you are now ready to subscribe loan documents. When you get to escrow, pen in hand, you discover your first-class rate is much higher than you were led to believe. The explanation: Your programme got a small more than expensive, the rates went up, or whatever. If you desire the rate you were quoted, you will have got to pay a couple of more than price reduction points to get it. For those of you who make not know, one price reduction point bes 1 percent of the loan amount. Nice, eh?
There are so many cozenages a dishonest lender can draw on you; I would need a book to discourse them all! You definitely can be a sitting duck for a lender who have his technique down. But what make you make to protect yourself?
Easy! Dont just leap at the lowest rate quoted to you. Heck, anyone can quote a low rate! But if its not possible, what good is the quote? More of import than the rate, you need to cognize whom you are dealing with. Investigate the lender before using them. Get referrals from friends and relations based on their existent usage of the lender, not based on what they heard or the lenders polished ads.
Another great beginning (and my favorite, of course!) is your existent estate agent. That is, if your agent is person you can truly trust. Agents regularly work with lenders and these lenders cognize that if they dont perform, they had better never put ft in that agents parking batch again, never mind their office. But do certain your agent actually have first-hand knowledge of the lender. Have he worked with him? How is he with clients? Are he honorable and truthful even if its bad news? How timely is he? How are his costs? These are of import things to know.
Also, be unfastened to person being honorable with you. Dont travel searching for the reply that brands you experience good. Sometimes, honestness hurts! If you look for that good answer, a less-than-honest lender will feel it and theyve hooked you!
Remember, your existent estate agent is not only working for your business, but also for your familys business, your friends business, everything. He would definitely desire to guarantee you work with quality people who will take care of you as well as he would. I cognize thats my philosophy.