Mortgage Broker Red Flags

[Minh Nguyen]

I spoke to my very first mortgage broker today (referred by a friend) and as soon as we got on the phone I was immediately bombarded with questions about my situation while any question I had about our relationship was brushed off with short, dismissive answers (some of my questions were: do you have realtors I should connect with or will you be working with a realtor that I choose? Will you be helping me find rates from a large pool of lenders? etc.) There was also zero intro about herself or her company; I had to look it up from her email signature when she emailed me docs after our call.

I was under the impression that I was in a good position, with zero debt (no student loans, car payments, or credit card debt), very good credit score, a 20% down payment saved up, and a sizable salary for a college grad. So I was shocked to hear her say that she needed to weave a story about my internship experience to prove I have longer working history, since I have "nothing" with my 6 months of working full-time after graduating and would have a hard time with lenders. I've heard some incredible stories about members of the BP community getting loans even with just offer letters before starting work! 

Is this conversation a red flag that this broker may not be suitable for me to work with or is it just a product of the stricter lending environment today and brokers are just trying to avoid wasting their time?

Another small thing that made me nervous was when I asked her about how I should gather documents (for pre-qualification) from my online stock brokerage account used for my company's employee stock purchasing plan and she didn't understand what that was, mistaking it for a 401k. Hmm....

I've learned from my BP edumacation so far that I should speak to a few real estate agents before deciding on one who is investor-friendly, but should I also be doing the same for a mortgage broker?

[Chris Mason]

Hi @Minh Nguyen,

I'm not that person, all I can do is speculate and pull the curtain back a little bit for you.

Seems like someone is busy... Rates recently hit a 12 month low after hitting a 7 year high last summer/fall. That means a lot of LOs are busy doing a bunch of refinances for all their clients that purchased within the last year and a half or so. I know guys that literally go from their initial phone call being 45 minutes, to 5 minutes, when that happens... For all intents and purposes they effectively stop being FTHB-friendly.

It's considered bad form for a lender to refer someone to an agent before they are preapproved. Most lenders have realtors they like working with, but it's no biggie if you pick your own. Agents and lenders are professionals and generally work well together since everyone has the common goal of getting you into a house.

I'll be honest, sometimes when I just got done talking with a biggerpockets.com person who knows me by reputation, I'll forget to do the "who I am" part of the next meeting or phone call.  

Eh, it's not really a huge deal. You just have to document a two year work history. For recent college grads and those who recently became qualified for their current job (such as by completing an internship), you do have to document that. In the SF Bay Area we call it a "tech wizard special"... the recent grad has 5% down and we put 'em in a $1m house, bankrolled by Twitter or Google.

Keep calling around until you find someone you like. While you're in escrow, you and that person will be joined at the hip via cell phone for a month or so. @Melvin List is in your neck of the woods, might as well give him a call.