Get a Good Lender

For most of us, the two areas where problems most occur is in the lending process and inspections. Let’s talk about lenders today.

While a buyer should always be able to select who they want, it is up to you to make sure that the lender they choose will provide solid communications, an accepted loan, and have very few surprises in the process.

Photo by Austin Distel.

Many buyers, especially first-time homebuyers, may not know where to start when it comes to finding a lender. They may initially want to use the people at their bank branch, without realizing that the actual underwriting is often done by people several states away.

You probably have extensive experience working with different lenders and can offer recommendations based on firsthand knowledge. You understand which lenders provide competitive rates, excellent customer service, and reliable approvals.

A good Realtor can note previous experience with lenders with hidden fees, poor communication, or lengthy approval processes that could jeopardize the transaction. By leveraging your network, you can save your clients significant time and effort in researching and vetting lenders on their own.

For example, I have had great difficulty with many large national banks (not all!). While they are often excellent at the retail level, they are sometimes less so when it comes to first mortgages.

In forty years, I have never had a smooth transaction with at least two of them. It often comes down to internal bureaucracy where something is needed, but two or three out of town people in the chain of command stand in the way of the client hearing about it or being able to correct it.

Much time is wasted and the process becomes unpleasant.

In one case, the lender’s underwriting involved stopping the entire process if something needed clarification or a form were missing. Since most loans involve multiple such situations, you can see what problems this caused. Each minor problem or question required several days of communication up and down the ladder.

We closed two weeks late.

The bank was bought by another well-known bank. A couple of years later, one of my buyers insisted on using the merged bank. Rather than adopting better processes, the merged bank adopted the practices of the former bank!

Another late closing.

To combat this, I suggest three lenders I have known for years early in the process.

Two of the lenders work with typical mortgage situations. While their underwriting is done out of state, the underwriters are not locked away in a “vault.” The originators have great relationships with the underwriters and are usually able communicate back and forth in a timely manner.

I have never had a last-minute problem with either of them.

My third lender is with a local bank that prides itself on personal service. They often hold loans rather than selling them on the secondary market. This means that they can be a bit more flexible.

Additionally, the originator also serves as the underwriter! At times, the bank may have slightly higher rates, but the process is often worth it to busy clients. Like the first two lenders, I have never had a last-minute glitch.

By assisting clients in selecting a reputable lender, you demonstrate your commitment to your clients’ success and financial well-being. This level of support not only strengthens client relationships but also increases the likelihood of a positive buying experience.

Helping a client choose the right lender is one of the most impactful ways you can add value and ensure a seamless home-buying process.