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  • Ryan O.

Choosing A Mortgage Lender


Are you looking to get prequalified? Here are three things you should consider when you speak to a mortgage loan officer:

1. Relationship

If you are new to the home purchasing process, your real estate agent can recommend a few mortgage loan officers.

As the client, you are in charge of your home purchase. Take the time to research each potential loan officer. Is this a person you can trust? Is this person knowledgable in the lending process? Do you have a good rapport with this person? Can this person assure you that he/she won't delay your transaction?

Don't forget: If you have any friends or family members who just purchase a home, you can ask them what loan officer they used.

2. Rates

You jump online and you find out that Mortgage Lender A has a rate of 4.2%. However, you quickly find out that Mortgage Lender B has a rate of 3.75%. You then notice that Mortgage Lender C has a rate of 4.4%. What's going on here?

- Mortgage Lender A's rate was not the annual percentage rate (APR). Rather, the rate you saw was the advertised rate.

- Mortgage Lender B's rate was actually for a 15-year adjustable rate mortgage (ARM), not for a 30-year conventional mortgage.

- Mortgage Lender C's rate was actually the APR.

If don't know how to compare mortgage rates, talk to your loan officer and your real estate agent.

3. Other Fees

There are mortgage closing costs. These costs could include property tax, mortgage insurance, the cost of the appraisal, and processing fees.

When you get prequalified, ask your loan officer if he/she can give you breakdown on your projected closing costs.

Did you know that some mortgage companies will have promotions? For example, I was representing a first-time homebuyer. During our transaction, my client's loan officer informed us that my client qualified for an "appraisal promotion." Since we were in escrow during this promotion, the mortgage company paid for my client's appraisal. This saved my client upwards of $500!

-RO

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Ryan Oda (RB-23073) is a Real Estate Advisor with Forward Realty (RB-19423) in Honolulu, HI.