Be careful of lenders

Happy Memorial Day Weekend Everyone!

I am spending my Friday talking to lenders for a purchase we just got on contract on Wednesday 5/24. I also spoke to the title company this morning to know their fees for closing.

You hear the most incredulous lines from lenders. Let's call him Mr. D from Lender Q.

• Mr. D said in disbelief on the phone "Are you really going to spend memorial day weekend talking to 10 different lenders getting quotes?"
• I responded, "Yes, I'm already talking to 5 and I don't see any problem with that."

I don't blame them. It's their job to get loans. But do not fall for it. Some loan officers are really good and honest, some are not so honest. This specific lender has asked me several times to go forward with them a put a "good faith deposit". Your answer should be no. You should get your quotes (Loan Estimate) on your timeline and on your terms. I told him, "I do not give Lender Q my intent to proceed. I am rate shopping and would like a loan estimate. I will not pay any money upfront since I have not decided on a lender". 

If a lender asks you to pay before going forward, maybe for a credit report fee, then find another lender. See regulation 12 CFR §1026.19(e)(2)(i) 

https://www.consumerfinance.gov/eregulations/1026-...

In that same conversation today ...

• Mr. D says, "Let me give you my professional advice (as someone who also owns investment properties......blah blah blah .. good service .... I'm the best choice."
• I respond, "Thank you for your professional advice. I understand your points, however I can't make a decision without seeing the numbers."

Up to this point, he mentions the rate, but doesn't mention the cost of that rate. Then he mentions the total cost of the loan (cash to close), and avoids talking about their specific lender fees. That's how they try to get you. They will hide their fees in the total cash to close cost.

You as a buyer have options. There are many lenders out there. Be nice to your lenders and hopefully they will be nice back. Avoid verbal agreements, everything is better in writing (that's a different story for another time).

Disclaimer

• The better your credit score, the more lenders you will have access to
• Pulling your credit with many lenders will affect your score. However, after pulling it once, there is a period which varies from 14-45 days, where subsequent pulls will not affect your score. If you already have a good score, these pulls shouldn't matter too much.
• Have documentation ready prior to talking to lenders. Don't lie while talking to lenders. If they say they can't lend to you, then move on to the next one.
• The lenders I am reaching out to are local and national lenders for a conforming investment property loan, 30 yrs fixed rate.

Happy hunting.