If you have read any of the thousands of articles about getting a mortgage in Seattle, WA, you may think that the rate is the most important thing that any lender has to offer. The question lenders have to answer above all others is, “What are your rates?”
The answer you may get is not necessarily helpful in your search for a mortgage unless you are a savvy rate shopper.
You may already know that most loans are sold to investors. Fannie Mae and Freddie Mac are two of the best known. The rates a mortgage lender can offer its customers change from day to day according to the price the investors pay for the funded loans. If the price of mortgages goes up, rates go down. If their price goes down, lenders must charge higher rates to compensate. The prices are constantly changing, according to the market forces. All lenders deal with the same market forces, so if rates are increasing or dropping for one lender, they are changing for all other lenders as well.
This does not mean that all lenders have the same rates but it does mean that comparing a quote from Lender X today to Lender Y’s quote from a week ago isn’t necessarily an accurate reflection on which lender will give you the best deal. Trying to compare rates from different lenders over a period of even several days is meaningless if rates are fluctuating.
You should also be aware that all lenders adjust the rates they can offer to borrowers according to several factors. The borrower’s credit score, equity/down payment, transaction type (purchase, refinance, cash-out refinance), occupancy and property type all have a huge impact in the rates available.
This means that scanning a general rate table online is not going to give you an accurate reflection on what rate you would qualify for unless the lender utilizes a rate quoting tool that adjusts based on the specific parameters entered. The Sammamish Mortgage Interest Rate Quote Tool for example will give a consumer accurate rates and costs based on the specific information entered into the form. The rates most lenders publish online are typically the “best case scenario,” and don’t take into account the adjustments applied to every mortgage.
With all that as preface, there are certain things you should expect from the lender and the loan officer you choose to handle your mortgage transaction.
1. Information. Getting a mortgage is a process. It is not a simple commodity that you can pull from the shelf. Your loan officer should be able to answer any questions you have in a straightforward manner, without using a lot of confusing jargon. Most people apply for a mortgage only a few times in their lifetimes, and the mortgage lending process has changed over the years. It continues to change to this day.
Your loan officer should be able to discuss the different options that may be available to you. For example, if you are buying a property with a smaller down payment, can he or she tell whether a conventional loan or an FHA loan might be more cost effective for you?
If you ask your Seattle Loan Officer a question about rates or costs do they provide you with helpful information or do they avoid the question and switch topics?
2. Scenarios. Your loan officer should be able to give you a written estimate of closing costs and payments. If you are considering different loan options, you should be able to compare your choices with a written document.
Don’t confuse this estimate with a “good faith estimate.” This is a document that no longer exists in mortgage lending. You should ask for a “closing cost estimate” to get a good idea in writing of the costs associated with the loan you are considering. As you progress through the loan process you will receive a disclosure called a “Loan Estimate” and later a “Closing Disclosure.” These are documents required by the current regulations. Your loan officer should be able to explain these to you in detail, in a way you can easily understand.
3. Communication. Does your loan officer and their team keep you informed through the loan process? Do they make it a point to send you regular updates on the status of your application, or do you have to call them to know where you are in the process? This brings us to…
4. Accessibility. Does your mortgage company answer the phone when you call? Will all the people you deal with be located in the same office? If you leave a message, will they return your call promptly? With the rise of the online lender we are seeing more and more companies limit access to the handling a consumer’s loan. While this may be fine in a perfect world, there are often times things come up during the mortgage process that require one on one communication. What happens if your Loan Officer is sick or goes on vacation? It is important to work with someone that has an organized team that can handle your loan whether your initial point of contact is available or not.
5. Customer Service. While it is possible to complete a loan application today without ever talking to a human there are many advantages to working with a full-service operation. There are many online lenders, some of whom advertise widely that have one goal of closing the loan as cheaply and efficiently as possible. While in theory this sounds great the mortgage process is complex and often times requires an experienced professional to get things done.
Combining technology and an experienced staff is essential in maximizing the customer experience. You should consider whether you will get the best experience from a mass production call center with entry level employees, or whether the biggest transaction of your life warrants working with someone with knowledge and can communicate in a clear and understandable way. A company with that has a great reputation while still offering competitive rates is not easy to find but definitely worth searching for.
6. Staffing. There is a great deal of activity happening behind the scenes as your loan application makes its way through the lender’s system. Your initial contact may be with your loan officer, but he or she is part of a whole team of people: processors, disclosure specialists, underwriters and funders to name a few. You should feel confident that the lender you choose has a competent staff of experts who can take your loan application through the many stages that make up every loan process.
7. Flexibility. The last step in getting your Seattle mortgage involves signing a thick pile of documents. Many of them must be notarized. Can your lender accommodate your schedule if you can’t take the time off from work or cannot travel to an office to sign the documents? Do they have technology that easily allows you to transfer documents, electronically sign and communicate in the way you are most comfortable with?
Buying or refinancing a home is a complex, often stressful process. The lender you choose for this important transaction should be one who inspires confidence, puts you at ease, and keeps you informed every step of the way.