6 Easy Steps to Shop for Your Mortgage and Be Successful

After 8 years helping families find the right loan for their needs, I want to tell you how I would shop for a loan if I were no longer in the business. Please note, if a good deal to you in buying a home is saving a couple hundred dollars in closing costs in comparison to another lender's offer of the same interest rate on the same type loan, this message is not for you. You might want to read the book, How Do I REALLY Decide What's Important in Life for Dummies, and then come back to this message. (wink wink) Now back to a more serious note, follow these steps and you will likely be more successful in choosing the right lender.

1. You need to figure out what loan officer you genuinely like the most first. However you come up with your list, get your list of lenders you plan on shopping for your mortgage. Some suggested best ways to derive your list are as follows; referral from a friend, referral from a Realtor, check with your local bank. Now, use your best people skills as you make first contact with each of these contacts at the lenders office (loan officers) to REALLY LISTEN to the "person" that answers your question and not so much the detail of the answer. You want to be a great listener in this first communication to find out who sounds more trusting and compatible with you. Maybe even try to get off the subject of mortgage just a bit. In this first communication, you might ask some mortgage questions to make sure they know their business, but interview them. (this step does not require a face to face appointment, so don't waste their time setting an appointment just yet) Once you've talked to your list of loan officers and decided who you like best, this will be the lender you target as your hopeful transaction coordinator and leader in your financing process. Lets call him your #1.

2. In most cases, when you are buying a home, you will have already gotten to your #1 (your #1 is the chosen/preferred lender) BEFORE you have found a house, because most Realtors won't show you homes on "their dime" unless you can show them you are pre-approved...and they have VERY good reason to make sure you are pre-approved before they take you out as well. Now that you have your #1 selected. You have a goal and you want to put that goal in the responsible hands of your #1. Your goal is to get pre-approved, get comparable offers from your list of lenders, get the answers to all your lending transaction questions answered, and find out what your prospective monthly payment and dollar out of pocket at closing estimates are. Just FYI, the dollar out of pocket at closing is NOT to be used at any point as a detail used in determining what lender you use...do not use a "bottom line" on an estimate sheet from a lender to compare lenders. Schedule a time to meet with your #1, face to face if possible, or at minimum, by phone. Allow your #1 to run a credit report, collect ALL of your income and asset documents to underwrite your loan, and in the end, complete your pre-approval. PLEASE NOTE, YOU HAVE NOT STARTED YOUR "SHOPPING" AND COMPARING COSTS YET!!!

3. At a point in time between meeting with your #1, mentioned above, and before you are ready to make a bid on a home, you need to get some numbers from your list of lenders for shopping purposes. Listen very closely here! You do not need, and you should NOT ask for a Good Faith Estimate, Initial Fee Worksheet, or any other template form that the lender has in his system to come up with the variables you need for shopping at this point. To compare lenders, you need to know 3 things: 1) Interest rate, 2)Points (origination and/or discount), 3) total of lenders fees. So get out a writing pen and paper and ask all three lenders what their total of lender fees are that you will incur by doing business with them, what is the current interest rate for the program that you and your #1 decided was the best loan program for you, and how many points do they charge for that interest rate. Your notes might look like this: $1190 total lender fees, 4.875% interest rate on a 30 yr FHA loan, and 1% origination (point). If you go against my shopping plan and ask for a GFE or Initial Fee Worksheet and think that you'll just pull out what YOU know to be the right fees and variables for shopping a lender, then you open yourself up to trouble. I'm not going to bother with the huge number of ways in which that can be used against you, and if you are not willing to take my advice about this, then it won't matter anyway.

4. Now that you have gathered the necessary numbers to compare your lenders, hopefully your #1 was sitting right "in the mix" with the other lenders. If he was .125% higher in interest rate than your other lenders AND the lender fees and origination were higher, you might need to have a talk with your #1, and if the fees were higher by much, you need to work with #2. There is nothing wrong with paying $200-$400 higher in fees and points for a similar or same interest rate if you are going to enjoy the process more with your #1, have confidence that all is going to go well while you and the family are packing everything you own to move, and your sure that #1's experience and advice is going to get you to your destination smoothly and with less collateral damage costs in the end. You are buying a house after all, and not a car, or a stereo system at a pawn shop...$200-$400 in extra fees and $8-$15 extra a month for a slightly higher interest rate is not a bad sacrifice to pay for comfort in the transaction, and to make sure you do not end up paying collateral damage costs at the end of the transaction because you chose a lesser expert to handle your business. (collateral damage costs may be for example: you don't close on time, so you have to pay $100 a day to your moving company while you wait for your loan to be ready, or your contract needs to be extended because your loan wasn't done in time and the seller wants you to put up more cash to make it worth their waiting on you).

5. At this point, you have compared your lenders by interest rate, lender fee total, and points associated with the offered interest rate. You now should have located a property you want to buy, and have an executed contract on that property. You now have an exact purchase price, and a selected title company in which was selected on the contract in the negotiation. Give your shopping lenders the exact purchase price of the home, and the name and number of the title company that was used (if the number is not on your contract, ask your Realtor for it), and give them a copy of your contract...the contract should tell them if there is a survey fee, and seller contribution and all that. Ask them for a Good Faith Estimate in return and that you will be deciding on locking in the next day or two...whether you are or not (this will keep them honest). The 2010 Good Faith Estimate is designed so that you can easily compare lenders, and if the costs in the Good Faith Estimate end up being higher by fee or rate at closing, the lender will be required by law to "EAT THE DIFFERENCE". When you ask these lenders for their GFE's, they will probably want to know what your credit score is and so forth. They may in most cases need that to give you an accurate estimate on your loan. As long as your credit score is above 700, it more than likely will not hurt you to let them pull their own credit report. They'll need to know your income and asset information too, just like you gave your #1, so you might try and have that in email or fax-able form. If your lender can not get you an estimate in 24 hrs, you really need to think about the availability this lender will have in answering your questions during the process, and therefore thinking about that being a reason to NOT use that lender. If they can not get you an estimate in under 48 hours (assuming normal business hours, not including Saturday and Sunday), you REALLY might think about not using them.

6. Now that you should have all your GFE's from the different lenders, just make sure that the lender you chose as your #1 is close or better than the other offers. You might even just ask your #1 to match it and in turn you would work with him. Lastly, while comparing deals, if any one of the lenders has an estimate where the interest rate is more than .375% better than the others and the costs are similar, be very leery and get additional advice from your Realtor or ask him directly why his rate is so much lower. Lastly, make your decision on whether your #1 can compete so you can work with him, or pick the next best option in line.

If at any point along the way you did not like your #1 anymore and the other options were not good either, find another lender to throw in. If you run into discomfort and can not find a lender you like after trying a variety of lenders, you might suggest taking yourself out of the "equation", and allow yourself to be advised and directed. Controlling personalities end up, in many cases, with 2 outcomes. 1)They end up working with someone willing to let the buyer run the show (inexperienced Loan Officers work with anyone), where in turn the buyer won't "let go of the steering wheel", so the inexperienced buyer leads everyone through a very bumpy ride where the entire process is like running a mile with an anchor on your back, or 2) the buyers expectations are underachieved throughout the entire transaction because they did not allow the expert to set the expectations because they thought they could control the process themselves...even if it is your 3rd or 4th time to buy a home, you have no business setting your own expectations in a loan transaction. Loan officers live a life directly related to how the market moves, and if tracking their income as it goes up and down like a roller coaster from year to year is not enough to tell you how the market changes and how often it changes, listen to the news. That being said, a loan transaction today is very dissimilar from one a year ago.

Best of luck in your home search, and shopping!

September 28, 2009 Frisco Mortgage Newsletter

Service First Frisco Mortgage Planner's Newsletter
SFMC Advocate's Cognition Circular
September 2009

As Your Mortgage Consultants for Life at Service First Mortgage,
we have teamed with, on purpose intent, alliances that help us provide the fullest of services for you. For example, have you seen an interesting home and wondered about the price?No need to wonder , and no need to call a high-pressure sales agent who will just make you feel obligated. The agents we align with are not the high pressure variety and our relationships with them make it possible for us to get the information on that home for you, for free and with no-obligation. Then, if you want to see the home, we can refer you to one of our Realtor friends that we know have a track record of happy clients.

Don't keep us a secret! (:

Sincerely,

Brad Lynch &
Michael GreinerService First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

How To Escape From The "Always More" Mind
You may know someone who skitters from one task to another, never enjoying an accomplishment before moving on to the next thing to be accomplished or mastered. And what does get done is never enough. In The Heroine's Journey by Maureen Murdock, this is called "The myth of never being enough." When you're stuck in this mindset, you're never satisfied with what you do, because something deep inside yourself tells you, "It's not enough." You're always thinking ahead. You agree that what you're engaged in currently is not enough. If you're gardening, you feel you should be working on your report, and if you're working on your report, you feel you should be gardening. Murdock recommends this exercise for overcoming this tyrannical way of thinking. Take a piece of paper and divide it into three columns. In the first column write, "I planted daisies." In the second column write, "I am satisfied." In the third column write, "And that's enough!" Though it's a simple exercise, Murdock says that if you practice it whenever you catch yourself being a self-critical, unsatisfied tyrant, that feeling of "not enough" will gradually disappear from your mind.

Write It/$ave it!!
Are you spending more money than you need to? It's a nagging worry, especially these days. Fortunately, you don't need an advanced degree in finance and accounting to analyze your spending. Try this: Keep track of your spending for one week. Just one week - longer, and you'll probably get too busy. But you can hold onto your receipts and add them up for seven days. At the end of the week, separate and categorize your expenses (use a spreadsheet if that helps you visualize better). You'll see what you're spending your money on, and chances are you'll find at least a few areas where you can cut back.

Bonus Block!!!!

If you're a logophile - a lover of words - you might find yourself cringing as you read these words! · Police were called to a day-care center where a three-year-old was resisting a rest.· When fish are in schools they sometimes take debate.· The short fortune teller who escaped from prison was a small medium at large.· The dead batteries were given out free of charge.· A dentist and a manicurist fought tooth and nail.· A calendar's days are numbered.· With her marriage she got a new name and a dress.· If you take a laptop computer for a run, you could jog your memory.· When she saw her first strands of gray hair, she thought she'd dye.· Acupuncture: a jab well done.

About Service First Mortgage
At Service First Mortgage, we work "By Referral Only". This makes it possible for us to spend 100% of our time with our current loyal clients for life, rather than chasing down our next "deal". If you or someone you know needs a mortgage consultant they can trust, please give us a call or email us.
"Don't Keep Us a Secret"!
Service First MortgageBrad Lynch 469-450-2723 bl@fmillc.com
Michael Greiner 972-261-1055 mg@fmillc.com

Halloween Riddles

Q: How do you mend a broken jack-o-lantern?
A: With a pumpkin patch.

Q: What did one ghost say to another ghost?
A: “Do you believe in people?”

Q: Why don’t mummies take vacations?
A: They’re afraid they’ll relax and unwind.

Q: Why didn’t the skeleton dance at the party?
A: He had no body to dance with.

2009 Frisco Economic Forecast by Stewart Title North Texas

How is the Frisco buyer's market effected by the economy and how might home sales finish out in 2009 in relation to the first half of the year? Will 2010 be a better year for the home buying and mortgage markets than 2009?

2009 Stewart Title Economic Forecast

Discussion at Park Cities Club
with Ted C. Jones, PhD, Senior VP — Chief Economist for Stewart Title Guaranty Company

Please Join Ted C. Jones, PhD for this discussion

Ted is the Director of Investor Relations for Stewart Information Services Corporation and also Senior Vice President-Chief Economist for Stewart Title Guaranty Company...he addresses the information needs of stockholders, conducts on-going research and supports economic and financial analysis for the company and its customers. An accomplished speaker, he typically gives more than 150 presentations on real estate and the economic outlook each year.

Wednesday, September 2ND
3:00pm – 5:00pm
Park Cities Club
5956 Sherry Lane – Top Floor
view map
Hosted by:
The Mavis Kilgore Team
Stewart Title North Dallas Office
Space is Limited So Please Reply Early!
RSVP to teresa.lynch@stewart.com

WCR Newsletter for the Third Quarter

Who To Believe While Shopping Your Loan

I was reading a blog on Money Magazine today about the best way to find a home loan. You can see that edition at this link (Money Magazine)
Sarah Max explained,
"When the easy money was flowing, you could get a great deal on a mortgage from just about anyone. But in today's credit-challenged world, all the avenues for finding a mortgage come with their own set of problems."

This is simple and a great intro to where we are at now in the industry. She went on to explain how the many banks have become very tough and tightened their standards and so forth. You see, brokers really have no direct relation with the money they loan, and that many times leads to a situation where more brokers than bankers would be willing to loan and "push" a loan that a banker or bank my turn down. Sarah makes mention of this in her message.

This is where I start to wonder, "is the helper trying to help the shopper in this case, speaking of Sarah with Money Magazine writing an article targeting the needed help of mortgage shoppers, or is she helping advertise the mortgage lead generating giants in our industry that typically support the broker and banker portions that established business by pushy sales rather than honestly earning referrals. Let me be clear though...I am not saying all bankers or brokers that purchase leads are not to be trusted, but I would place a bet on it that if you did the research you'd find there are more less qualified Loan Officers working primarily on purchasing leads rather than the Loan Officer who has made relationships through honesty and hard work. "Bonds between people keep one honest. If you don't have a bond with someone, you have nothing to lose"...for being dishonest that is.

Now this is where Sarah crosses me a little on whether she's helping the shopper or the major lead company. Sarah says,
"And while online lending sites hold the promise of one-stop shopping, some have developed a reputation for playing bait-and-switch on rates and not fully disclosing fees. All this adds up to a major shopping hassle. If you want to get the best rate, you'll need to tap at least two of the sources below. Scour the Web. Shopping for a mortgage online has come a long way from the days of one-size-fits-all rate listings. At some sites, including Bankrate.com, MortgageMarvel.com, and Zillow.com, you can now shop anonymously and get accurate rates. Keep in mind that all these sites act as referral services, so eventually you'll have to close the deal with a bank or mortgage broker."

The aforementioned lending website companies as I may bring attention to are lead generating companies. Sarah even mentions that you will shop their rates and fees and eventually be dumped onto a banker or broker. There is very little accountability between the bankrate.com type company and the lead purchaser loan officer for the receiver of the lead to be, should I say, less than straight forward or not slippery. That being said, Sarah is suggesting to avoid the "bait and switchers" and mentions it nearly just like that, yet she suggests to her readers to check with these lead generating sites that sell their leads to entities with more probable numbers of bait and switch type loan officers. THAT is why I wonder if maybe a blog such as this is contradicting...efforts to educate and help mortgage shoppers crossed with the demand for advertising and keeping relationships with the people who probably advertise with them, creates a less than conducive atmosphere sometimes.

Here is what I suggest. Those large "engines" such as the aforementioned bankrate.com's and so forth are large enough that they know they have to be on target when advertising and therefore will list their rates and fees pretty accurate to current competitive market costs...lending laws watch them closer than the small guys and therefore they are held more accountable many times. Now since it is obvious that today's market isn't forgiving to the person who prioritizes the "cheapest" loan, but first prioritizes the evaluation of trusting the loan officer with the most competitive rate, use the big "engines" to gauge what is competitive and then shop different lenders by your personal character "radar". If you feel rushed or feel like you are being pushed at all, trust in the old adage, "if it's a good deal, it don't have to be committed on today". Be sure YOU the buyer/shopper define committed right. Committed should mean to you in the mortgage industry, I've spent money. A lender may say, "sir, I realize you are shopping and I feel like rates will be higher tomorrow. Do you mind if I lock your loan?" As long as they don't require upfront non-refundable money if you don't use them, and you intend on using them if it works out, let them lock it for you.
Best of luck in your home shopping!