Characteristics of a Good Lender????

Question

Hi BP, I'm seeking some advice on finding a good lender. I'm just getting started and it seems like lenders won't give me the time of day unless I do a loan app first. I want someone who will answer all of my questions first, without pressuring me to do an application. I don't want to apply and take a hit on my credit report if I won't get approved (one of the issues I've had in the past was a high debt to income). Can someone advise me on how to find a good (patient) lender? What characteristics should I look for in a lender?

Chris Purcell · Answer

Good characteristics -Low feesLow interest rate Actually giving me the money

Lawanda Curtiss · Answer

By the way, I'm in the Atlanta area if any of you can suggest someone.

Lawanda Curtiss · Answer

Thank for the insight @Chris Mason. Now I know not to take it personal when a lender doesn't want to spend time answering all of my questions before I apply for the loan.

Chris Mason · Answer

Hi @Lawanda Curtiss,I'll go for a 30 or 45 minute pre-qual / Q&A before asking for paperwork, but some lenders will only go for 5 minutes without paperwork. Time is our most precious commodity, and most (well over 50%) of the people we talk to are a waste of it. It's the same reason real estate agents don't want to show you more than 0-1 houses without being formally preapproved: Paperwork is a quick way to weed out many of the tire kickers, just like many landlords charge a $25 application fee to tenants which is more about weeding out time-wasters than it is the actual $25.Paperwork and a credit inquiry is basically a good faith deposit on our time. It takes a well organized person about 15 minutes to upload or email all the standard paperwork. If a borrower wants us to go over our time cap (be it 5 minutes or 45), we need that good faith paperwork deposit to show they are invested in the process too and not just wasting our time.In terms of the credit inquiry thing, I pull my own credit every 3 months at work and my FICO is still over 800. The things a consumer has been doing for the past 7 years is what overwhelmingly drives their FICO score, not mortgage credit inquiries. If you're worried about your credit right when it's time to apply for a mortgage, it's a little late in the game. My assumption, when someone is insistent after I've given them my 45 minutes, still doesn't want me to pull their credit is that they probably have trashed credit and want to keep using up my time without me seeing that.The good news is that after you make that paperwork good faith deposit, most lenders are generous with their time and happy to answer your questions.

Lawanda Curtiss · Answer

@Jason Hirko Thanks for the info! That's exactly what I'm looking for...someone who will prequalify me without running my credit. I didn't know that was an option. Maybe I will ask that question first with the next lender I find.

Lawanda Curtiss · Answer

@Andrew Holmes I've been talking to residential lenders. I haven't tried any hard money lenders.

Jason Hirko · Answer

@Lawanda Curtiss What type of lender you are looking to deal with and what types of questions you are asking? I talk to people all the time who just keep trying to sell me on how great the deal is (big red flag) or who want to go through every hypothetical imaginable without giving any real information. For example, the person who calls and says 'what's your minimum income amount to qualify for a loan?' That's an impossible question to answer without more information, and it seems like it would be so much easier for everyone to ask 'I make $xx,xxx a year, would I qualify for a loan?'Also, most lenders are willing to give pre-approvals without running credit - they'll just say the approval is contingent on a credit score between xxx and zzz.The most important thing to remember is your lender is (should be) on your side. The more information you give and the more precise it is, the more accurate quotes you can get. Then shop them around and go with who is best for you.

Andrew Holmes · Answer

@Lawanda CurtissThe place to start is by knowing your score, current level of debt. When you are talking to lenders are you talking to residental lenders, commercial lenders for investment properties, hard money lenders or brokers. Most of the time is you the lenders requirements there is no reason for them to run your credit. You can always fill out a loan app if you want for give them your PFS. They can look at it and tell you what is doable and if their loan programs will fit. Brokers are notorious for promising all sorts of things and not being able to come through because they are just the messenger. You need to go to the decision makers. What are you to do? Flips or rentals. That will dictate who you should go to. Have you talked with any private money folks in your area?