Mortgage Bankers - choose one or shop multiple?

[Tim Coulter]

Ok folks, here is the story. I have a friend who is a mortgage banker/broker and I went and got pre-qualified with him. I completely trust that he would do a stellar job executing quickly, making listing agents confident in my offer, and doing his best for me.

I also reached out to another lender, recommended by my agent who I met and believes he knows his stuff. He's got a lot of experience and I from my interactions I believe he will also do a fantastic job. I went ahead and submitting info to get pre-qualified with him as well.

My mindset was, I might as well talk to a number of lenders and get pre-qualified with a few of them at around the same time so all the credit pulls count as one. My mindset was also, then as long as I believe all can execute, I will shop the best rate when I have a deal and am looking to price lock. The 2nd lender knows I am engaging other lenders and it doesn't bother him but he is likely confident that he may get the business due to his close relationship with my agent. As I was updated my friend on things, I shared that I got pre-qualified with another mortgage banker/broker and my friend was shocked and not happy because he thought I was committing to work with him. And he was putting a lot of time and energy into underwriting and he rushed on a recent HUD deal I was going to bid on (that never panned out). He felt that if I was engaging other lenders and not committed to working with him, that I may not be a good fit and he was going to invest his time with people who he knows will work with him.

I totally get his point of view, but what is normal and recommended for investors (I am looking to house hack the property I purchase)? Do you find one lender that you trust that can shop different places for the best mortgage offering for you, or do you engage multiple lenders, have them underwrite and pre-approve you, and then shop rates at the end?

Thank you for your input and recommendation as I navigate these new waters.

[Alex Bekeza]

@Tim Coulter It can be frustrating as a broker to spend hours trying to structure a deal for someone who ends up going elsewhere but it pretty much comes with the territory to a certain extent.  I think that you sound very conscientious about the value of each of their times so just continue be as honest and forthcoming as you can with each of them.  

I've personally never told someone that its not going to be a good fit if they are shopping me around hahah Saying that pretty much breaks my promise that I'm working with the borrower's best interest in mind and if for some reason I'm not able to recognize the best program for that person and another broker is then kudos to them.  They deserve the deal as unfortunate as that would be for me.  However, I do try to understand all expectations and limitations up front.  

The truth is that if you give as much information up front and the broker knows exactly what questions to ask in order to determine which lender's guidelines/programs would be the best fit then that first broker should be able to come up with the best terms available for your scenario.  

Like anything else, of course brokers have niches or certain types of programs that they know back and forth and others they may be aware of but need to study up on in order to truly sell/execute. Personally, I'll be honest and say I'm no expert in FHA 203k loans. If a friend came to me for help on an FHA 203k loan for their house of course I could help them but its not something I'm out there trying to solicit business on really. Its on the back burner of things I'd like to study and be able to push. Until then, I'd defer to someone else in my office who would hit it out of the park.

A very common thing I see is people have a "mortgage buddy" who is great at residential stuff but totally novice with non owner occupied investment property loans.  That is why from the beginning I made the latter my main focus.  Not to mention I prefer dealing with investors simply because its more business and less emotion.