Find 4 loan officers appropriate for your situation
Four is the magic number if you want to have negotiation power. You can get away with three, but in our experience, one of them will drop out, so it’s wise to have a spare.
What do you mean by “appropriate”?
Different loan officers have different access to products. It’s important that all four of your loan officers can find good loans for your particular profile.
If you have a job where you have a W-2, have worked at your current job for more than two years, have a credit score of 720 or higher and are putting 20% down, then most loan officers will be able to find loan products for you.
But if you freelance, have a less than stellar credit score, own a company with variable cashflow, are not putting 20% down, have complicated financial issues or other non-standard aspects of your profile, you may need to find loan officers who can serve your unique profile and needs.
If you do have a more tricky profile, don’t feel discouraged. There are loan officers out there for you. We will help you find them.
Your four loan officers – who should they be?
#1 From your current bank
Easy. Just call your bank or credit union and get the name, number and email of a mortgage loan officer. (Most people stop here but this almost guarantees you’ll overpay, sometimes by a lot).
#2 Find a mortgage broker
While your bank only has access to their own products, a mortgage broker has access to many companies’ products. They are like a middleman between what you might call the wholesalers of the mortgage industry and you, the customer. Studies have shown that brokers often give the best rates, too.
Ask around to friends, colleagues, family, top real estate agents, and other professionals for a mortgage broker recommendation.
If you draw a blank, you can find local mortgage brokers by going to Google Maps and entering “mortgage broker” and the zip code for the area in which you are buying a home in the search field.
#3 Find a bank (not yours) local to the property you are buying
Things come up during the buying process where it can help to have a local mortgage loan officer. Things like appraisals, flood insurance issues, and other issues that are particular to the location. This can be especially if an appraisal comes up short or if there are tricky issues with homeowners insurance due to proximity to water or climate issues. A local mortgage bank will have experience navigating regional things.
An easy way to get a local mortgage loan officer is to ask a respected local real estate agent for a recommendation.
#4 Consider a credit union, another mortgage broker or an online lender
A study of credit unions found that credit unions have slightly lower rates for mortgages than any other type of lender. That makes them potentially the wisest of all choices. Still, you don’t want to stop with just a credit union, as you won’t have negotiation power. This site lets you search for credit unions by state.
You can’t go wrong adding in one more mortgage broker to the mix.
Online lenders are also an intriguing option – many of them offer perks such as easy upload of documents, faster, less painful process, etc. One caution about online lenders: while they often have the best technology, they may have limitations in dealing with regional issues, so definitely don’t ONLY choose online lenders for your four loan officers.
Here are some online lenders (in no particular order):
Resources to find more loan officers
If you haven’t gotten quality referrals and if the links above haven’t yielded results, here’s a site that has a mortgage lender directory by state.
How to determine if the loan officer is “appropriate”?
An appropriate loan officer is one who can actually qualify you for a loan, given your unique situation, which includes type of job, job history, credit, amount of down payment, and sources of income.
Once you have your list of four contacts, let’s go to the next section and ask them what you need to know with an easy script!