Shopping Around for A Lender - Any BEST ways to do this?

Question

Hello there!So here I am, newbie, going on my third month of BP, eager to get out and invest. After trying to connect with a lender, I hit a snag. No response after several emails and phone calls were exchanged. Not sure why but... time to search again!I don't want to over-complicate things but I am concerned that shopping around is going to take some hits to my credit score. Can someone assist in the BEST way to shop for a lender...My goal is to house hack....

Bob Okenwa · Answer

1. Interview them before applying. You can usually get a feel for things by exchanging emails and seeing what kind of response/response time you get and speaking on the phone to see if they are organized and can actually follow through2. When shopping for mortgages, all credit pulls are scored as 1 pull if you apply within a certain amount of time. Here is the timeframe directly from FICO:"Research has indicated that FICO Scores are more predictive when they treat loans that commonly involve rate-shopping, such as mortgage, auto and student loans, in a different way. For these types of loans, FICO Scores ignore inquiries made in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won't affect your scores while you're rate shopping. In addition, FICO Scores look on your credit report for rate-shopping inquiries older than 30 days. If your FICO Scores find some, your scores will consider inquiries that fall in a typical shopping period as just one inquiry. For FICO Scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO Scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO Scores."

Stephanie P. · Answer

@Jasmine BenfordI like to view lending as if it's Plinko on The Price is Right. The borrower is the chip that gets dropped into the top of the board and the different nuances of each loan and lender are like the pegs that the borrower has to navigate on the way to the bottom where they will have a successfully closed loan. By successful, I mean the loan product fits the borrower's needs and the rate is competitive.Upen Patel posts a lot and does a fine job. His reputation on Biggerpockets is stellar and this is not meant to take anything away from him in the least, however, I could name several lenders on here that are very knowledgeable with equally stellar reputations and that could also steer you in the right direction. I would respectfully disagree with @Russell Brazil and urge you to shop for both product and rate. If you're looking for a standard 30 year fixed on an FHA loan where you're doing multi units, that would preclude a lender like US Commercial (me) and Lima One and the various other alternative lenders so that part of the Plinko board is removed. Once you know what product you're going for and the term, all you're really doing is shopping rates and overlays. If you're looking for just a single family property, you could go with a lender like Movement Mortgage that has a 97% Fannie Mae product, but gives you the 3% down payment as a grant if you qualify. @Michael Cohen is with Movement, he's here on BP a lot and he's local to you in Towson. My point is if you didn't shop, you wouldn't know if there are any twists to guidelines that could work in your favor.The bottom line is shop around. You may go with @Upen Patel. By all accounts, he does a great job and has an arsenal of products at his disposal. You may go with @michael cohen. Both are great choices. You could even go with someone none of us has ever heard of (and if you do, be sure to post the experience right here), but get a feel for your lender so you're comfortable with your decision. Best of luckStephanie

Russell Brazil · Answer

Just use @Upen Patel. A lot easier than trying to contact a dozen different lenders

Upen Patel · Answer

@Russell Brazil Thanks for the mention.

Jasmine Benford · Answer

Thank you @Russell Brazil @Janna Ascasio @Andrew Johnson !

Andrew Johnson · Answer

@Jasmine Benford Well, I'm guessing you'll get referred to some lenders here, so that's a start. If you're working with a realtor I'd ask them to give you the names of three lenders to reach out to. Use the realtor as a referral source and you'll probably get a call back pretty quick. Another benefit is that the realtor will (hopefully) refer you to a lender that's worked with people in your situation before so it just helps quicken the process and they can advise you on potential bumps in the road.