I’m working with a West Seattle couple who are getting ready to buy their first home. This is something that is not unusual for me to hear:
“Our real estate agent was wanting us to contact a few lenders and have them all pull GFEs on the same day with the same perameters so we can choose who to go with. Then whoever has the best rates/lowest fees we were planning to have pull our credit…”
The real estate agent has good intentions, however this may not be the best advice for how to select a mortgage originator. First of all, this couple may find it difficult to estract a good faith estimate from a mortgage originator without being in contract. This is due to HUD’s [flawed] regulation that if a LO issues a GFE without a property address, once the buyers actually have a contract, the bona fide address of their new home will not constitute a “changed circumstance”.
It is solid advice that if you’re going to shop lenders, do so at the same time with the same perameters–just don’t expect a good faith estimate. DO get something in writing from the lender (it may go by many different names, including “rate quote” or “worksheet”, etc).
In addition to rates and fees, here are some other suggestions I think one should consider when selecting the professional who will be helping them obtain the financing of their home:
How long have you been a mortgage originator? I began originating mortgages on April 1, 2000. Prior to that, I was in the title and escrow business for 14 years.
What type of mortgage company/institution do you work for? Most will say bank, correspondent lender (some LO’s will call themselves “mortgage bankers”), mortgage broker or credit union. Each type of company offers unique advantages or disadvantages. Mortgage Master Service Corporation is a correspondent lender.
What type of programs does your company offer? We offer FHA, VA, USDA, Conventional, Jumbo (non-confoming mortgages). If you’re considering a certain program, such as FHA, ask the LO how long they’ve been originating that specific type of program.
Where are your loans physically underwritten? I’ve worked with our same underwriters for over 10 years at our main office in Kent since 2000.
Are you NMLS Licensed or Registered? There are differences between what each type of LO is required per the SAFE Act between Licensed and Registered LOs. LO’s who work for a bank or credit union will try to tell you that they’ve been adhering to the SAFE Act…only Washington Licensed LO’s are regulated by DFI and have a license to lose. There is more required of LO’s who are licensed per the SAFE Act than those who are registered. I’m NMLS Licensed and have been licensed since 2007 (when state licensing started).
I also recommend “googling” your mortgage originator. It’s totally my opinion, and perhaps a bit biased, that if your mortgage originator blogs or has a social media profile, their reputation is gold to them. They tend to be more transparent and current on ever-changing guidelines IF they are writing their own content. Google me!