The Mortgage Porter

Commitment…ah hah!  I bet I just lost have of my readers out of fear from that one  word!  We’ve had a series of post recently at Rain City Guide that has developed some very interesting comments and dialog.    Here’s are excerpts from a recent post of Ardell’s:

Me:  “…if a buyer comes to you with a lender and has gone through the preapproval process, you might steer them to another one?”

Ardell:  “Absolutely YES….Are you suggesting that the “pre-approval” comes with some kind of “obligation” to use that lender? “   

A response from a real estate agent like this should not surprise me…but it did.  This probably served as a much needed personal wake up call.   I know when consumers are shopping me…and I have worked with a few real estate agents who have counseled their buyers to shop.   They call me with the same script almost word for word, “All I want is a Good Faith Estimate…”   I believe this agent (it’s not Ardell) is using my GFE to keep her preferred lender “honest” with his rates and costs.   

As I’ve mentioned many times in this blog…odds are you cannot successfully shop interest rates–they are a moving target and change throughout the day.   Any Joe Schmo L.O. can quote an enticing rate to get you drooling and then…when it’s time to lock (assuming he’s really locked in the rate and not gambling it) you may have your real rate.   At closing, with Joe Schmo L.O. you’ll discover your real closing costs.   (Always bring your GFE to your signing appointment).

The big issue I had with the post was the practice of going through the steps of getting preapproved with a Mortgage Professional just to drop them at the curb when you have a bona fide transaction.    Ardell brought up an excellent question though, when are you committed to a Mortgage Professional?

When somebody contacts me for the first time.   I’ll ask them a few questions, including what are their expectations of me at this point in time.   Some just want rates, have questions or would like to have an idea of what they qualify for.   This takes anywhere from five minutes to a half hour.   I certainly hope that I’m beginning to develop a relationship and to show the client that I’m worthy of their business…but if they move on and elect to work elsewhere, that’s fine.   There is no commitment at this stage.   You’re just dating and getting to know each better.

Once you decide to move forward with a preapproval, if you are working with a Mortgage Professional who has been referred to you, they are responsive to you, have earned your trust and you seem to have a decent relationship…I think you should “commit” to them.   With the preapproval phase, you’re providing a Mortgage Professional with all of your income documentation for the past two years, savings and assets and allowing them to delve into your credit history.   The preapproval process may take hours or it may take days (depending on the situation).    This is a lot of work for Mortgage Professionals…and yes, this is what we do for a living.   Keep in mind, as much as a Mortgage Professional would love you to feel like you are their only client, we are often juggling quite a few transactions along with various potential buyers who are just interested in quotes or are in the “dating phase” as I mentioned above.   

Once you are preapproved, the Mortgage Professional issues a preapproval letter in the buyers name stating they have gone through all of these steps and are committed to providing the buyer financing.  We know this is not the perfect and that commitments from unsavory lenders or individuals are worthless…however if you have a solid Mortgage Professional, you as the client should honor that commitment as well.    In addition to the time spent with the preapproval process, there are often countless emails, phone conversations, letters…you may have several weeks invested into each other.    You are “going steady”.   Please don’t date other LO’s behind your mortgage professionals back…at this stage.  If there’s something you’re not happy with, communicate with them or move on before spending more of their time and resources.

Once you find your home and have an accepted offer (signed around purchase and sale agreement)…I hate to say the “m” word…if you’re still reading this…but you’re almost married!   After a lot of hand holding, late night chats and frequent emails together, your transaction is coming to fruition.   By now, you should really know your Mortgage Professional.   If you doubt your rate when you’re locking in, you can always ask them.   Tell them you noticed xyz rate at the bank this morning…what ever…kind of a “is that a blond hair on your collar” check. 

My point is…in this post that is all ready too long (my apologies), when  you have a signed around purchase and sale agreement on your home is NOT the time to begin shopping for lenders.   Especially if you all ready have, as Brian Brady put it, used someone else to do all of “the grunt work” to get you preapproved.   Now is when the Mortgage Professional who has worked with you to get your loan approved really has a chance to do their job and see your transaction through to closing.   

And, ideally, I hope to maintain my relationship with my clients long after closing.  I hope they will continue to rely on my expertise when they have mortgage needs in the future, whether that just be a simple question or if they need to refinance or buy their next home.   

This is a relationship business and it’s a two way street.  If you expect to have your Mortgage Professional to be devoted and available at your beckon call, shouldn’t they be able to have a little faith in the borrower?