How To Spot Red Flags In The Mortgage Process
Mortgage Loan Officers will generally do everything they can to get the best possible rate for their clients, but just like in any industry, you may come across Loan Officers who make promises they just can't keep. In this week's video, Jamie Cavanaugh explains what you should expect from your Loan Officer, and how you can catch the red flags before they become a problem
Hi everyone. We get asked often what clients should expect from their Loan Officer.
We believe that the reason we have earned repeat and referral business from our clients is the level of service that we provide.
Most Loan Officers will not quote interest rates without having a full loan application and there’s a good reason for this. Many factors affect your interest rate – including your credit score, the amount of down payment or equity in the home. Quoting a rate without the full picture can lead to inaccurate information and the Loan Officer may not being able to honor their quote.
If you are refinancing, ask for three interest rate options – the rate which comes at no points, the rate which offers a lender credit, and the rate which comes at a cost also known as points. This will give you a picture of which option makes the most sense for you depending upon the amount of time you plan to stay in your home and the type of loan you are getting.
If you are purchasing, ask about all of the loan types that you qualify for. As an example, depending upon the amount of your down payment, a US Veteran or Active Military client could qualify for a VA loan, an FHA loan, and a Conventional loan. It’s important to compare all of your available options and talk with your Loan Officer to make an informed decision about which is the best fit for you.
Once you have completed a full loan application and submitted your income and other documentation, you should expect to receive a written Loan Estimate from your Loan Officer. Your Loan Estimate will outline your loan type, loan amount, interest rate and payment terms. It will also show the amount of costs associated with your new loan – including prepaid items like your home insurance and property taxes along, with one-time charges like title insurance, appraisal and recording fees.
Your Loan Officer should thoroughly review your Loan Estimate with you and give you a chance to ask questions or make adjustments to your new loan.
At the end of the day, Loan Officers should be your trusted advisors on all things mortgage. Never be afraid to ask questions and always expect to be presented with your options.
Thanks for watching!