A mortgage lender's job is to provide the consumer with money to purchase a home. There are different types of lenders, and understanding the difference can make it easier to understand what to expect when working with them. Some mortgage lenders work directly for a lending institution. In cases such as these, the lender basically lays out all of the options that their institution provides, determines which ones you qualify for, and helps close out the loan. Other mortgage lenders work as brokers. These lenders work for a variety of lenders, and will choose from a variety of loan packages to choose the one that works best for your situation. While it may seem like a mortgage broker will guarantee you the best interest rate or the lowest closing cost, it is not that simple. Mortgage lenders that are employed through one institution have their salary paid by that institution. Mortgage brokers receive commission from the closing of a loan, or a fee from acquiring the loan. This means that their fee is built into your loan package somewhere. This does not mean that a mortgage broker is a poor choice; just that it is not always the best one. It is important, if you decide to use a mortgage broker, that you know exactly how they will receive their fee.
Where Does Customer Service Fit In?
The process of applying for a loan is relatively straightforward, regardless of what lender you choose. The lender will expect to see copies of your financial records, and will expect to have recent appraisals and title searches on the property before the loan closes. What often makes the difference in how easy or how difficult it is to find a loan is the customer service aspect of mortgage lending.
A successful mortgage lender will realize the importance of treating each client as an individual. Some home buyers are first time buyers or veterans, and may qualify for specific loan programs with lower interest rates or no closing costs. Other borrowers may have credit difficulties which make it hard to qualify for a traditional mortgage. The competent mortgage lender understands these issues and is familiar with the suite of products that they offer to provide these special cases with options that enable them to buy a home.
Mortgage lenders should also realize that the most straightforward case often causes stress for the home buyer. While lenders go through the process on a routine basis, it is the rare home owner that purchases so many homes over a lifetime that it becomes a routine matter. The challenge, then, for the lender, is to not become so jaded in the process that they ignore the common new buyer concerns that they have heard a million times before, but, to the buyer, are new concerns.
If, early in the mortgage process, you have trouble communicating with the lender, it makes sense to go with another lender. A professional mortgage lender should be available to answer your questions during business hours, and, if unavailable, should return your calls or emails promptly, within one business day. If you cannot establish this type of relationship with your lender, it may not be a good match.
Making Their Job Easier
With all of the talk about what to expect from a mortgage lender, it is easy to forget what the mortgage lender should expect from you. When you apply for a loan, you should be prepared for your financial history to be laid bare. This is an intimidating process for many people, but avoidance does not make it any easier. Mortgage lenders are accustomed to seeing all types of financial situations, and will work hard to find a loan to fit your needs, but they need your help.
At the first meeting with your lender, you should come prepared with tax records from the last five years, recent, such as the past six months, bank statements, and copies of any paperwork for any investments that you may have. You should also know how much you owe on any credit cards or other monthly debt, such as car payments. Without this information, the lender will not be able to determine your debt to income ratio, which is necessary to determine how much of a monthly payment, and therefore, how much of a mortgage, you can afford. If you show up for the initial meeting without this information available, you are wasting your time, as well as the time of the mortgage lender.
Another way that you can make the job of the mortgage lender easier is to have some idea of exactly how much you are willing to pay each month. It is often the case that you qualify for a larger mortgage than you are comfortable servicing. Look carefully over your budget, prior to the meeting with your mortgage lender, and determine approximately how much money you can afford each month.
By taking the time to prepare yourself for the meeting with a mortgage lender, and knowing what to expect from the lender, you can be assured of receiving the best advice, and the best rates, on your mortgage.
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