Skip to main content
Homeowners - think back a moment to your last re-finance or purchase transaction....

How did you chose your lender? According to a just released study by Lending Tree & Harris Interactive, chances are you probably signed on with the first lender you spoke with. True?  Lending Tree reports that roughly 40% of homeowners surveyed went with the first loan officer they spoke to.
As restated in a Forbes article on the report, 2 out of 5  buyers take the very first home loan deal presented to them, regardless of whether a better one could be had.
Curiously, 96% of the survey participants said they compared prices when shopping for anything else besides mortgages.  Heck, the average consumer compared at least three home computers before buying. And special question for all the Realtors: How many houses did that buyer look at before picking "the one" to make an offer on?  The end result? Only 28% surveyed felt confident that they got the best possible deal on their mortgage loans.

Even in the current marketplace, there are hundreds of loan originators to chose from; mortgage brokers, mortgage bankers, credit unions and federally chartered retail banks. They offer any number of different loan programs. Different types of loans. Different lending guidelines. An array of up front closing cost requirements; loan durations, interest rates. Their are a veritable smorgasbord of money lending options.

Sure those choices can make the process seem overwhelming, but we live in a society where we choose from  20 or 30 different types of ragu spaghetti saucees or 41 types of crest toothpaste in the shopping aisle most every day. We are used to making choices.

A reputable loan officers can help a buyer sort through those offering to hone in on the best products and  get the job done, but why only speak to one loan officer? Any given loan comes to a borrower at a price; Two actually; upfront closing costs and then interests payments over the life of the loan. Combined they can add up to tens and hundreds of thousands of dollars.

I have long counseled clients to speak to two or three different lenders in order to ferret out the very best options available to them. I always stand  ready to help my clients chose the best loans offered to them. I know many other lawyers who do so too. It only seems reasonable to me to try to help clients get the cheapest loans they can, don't you think?

Federal law makes this easier than one might think. Every lender is required to provide their loan applicants with two documents to facilitate comparison shopping; a Truth in Lending Disclosure and a Good Faith Estimate of Closing Costs. The Good Faith Estimate even has room to allow for comparisons of different loans, right there on the form!

Buyers looking for purchase money mortgage loans and owners looking to re-finance are urged to take a second look - that is, talk to a second (or third) lender to find the best loan on the best terms possible. Feel better than the 60% of those survey participants who did not bother to shop around. Close with confidence.

Let your closing lawyer know if you have trouble comparing various offerings from the lenders you engage. We can help.
Labels:

Comments

Refinancing Real Estate Closing Lawyers said…
Hi all,

Excellent writing about real estate attorneys, it is actually useful for me. keep writing and happy blogging. Thanks!
February 11, 2011 at 11:19 PM
Post a Comment

Popular posts from this blog

PLM Title Shuttered

Title insurance is a critically important part of any real estate transaction; or at least it should be. The title company guaranties the "quality" of an owners interest in the property - that there aren't any (unknown) liens or defects. No buyer that I work for will purchase a property without it. Title insurance is only as good as the insurer. We want to know that the insurance company, like the Rock of Gibraltar , will always be there. We want to sleep easy at night, knowing that the client is protected. That said, it was a bit distressing to see that PLM Title Company shut its doors, without any forewarning last week. Worse still, this morning's news is that there is a criminal investigation underway - and that we do not yet know why. Old timers like me shudder with memories of the great Intercounty Title debacle five years ago. Here's to hoping that this one is nothing like that one. Set aside the problems involved trying to make a claim against a defun...
6 comments
Read more

FHA Loans and Condo Sales - Is Relief on the Way?

By all outward appearances, state government in Illinois has ground to a complete halt, with all eyes focused on the Governor's "problem" and all the related fal - der -rah. Its hardly business as usual in Springfield, but not everything has ground to a halt. Several new bills have been introduced this week. That is not to say that they will be of benefit to we the people. Nonetheless, the cogs and gears are turning, and we are hoping for the best. One such proposal comes from Rep. LaShawn Ford of Chicago's west side, who is himself a real estate broker and entrepreneur . He is the author of House Bill 155 , introduced & referred to the Rules Committee Wednesday. It seeks to address one of the most common problems I am seeing in condominium resale transactions these days; the tension between many Declarations of Condominium and FHA loan guidelines. Many Condo Declarations provide Associations with a "right of first refusal," which basically allows t...
3 comments
Read more

MAYOR DALEY PROPOSES TIF FINANCING FOR SOME DISTRESSED PROPERTIES

Lets see how City Council reacts on this one, but the Mayor introduced a pretty interesting little ordinance that might be a real boon to first time area home buyers willing to buy and rehabilitate some bank-owned properties. Progress Illinois reports that the mayor's bill, introduced on March 9: "seeks to tackle the growing problem of vacant homes that are blighting neighborhoods across Chicago, and in particular in minority communities. Called the Vacant Building TIF Purchase and Rehabilitation Ordinance, the  bill  (PDF) proposes allowing residents with a household income no greater than 100 percent of the regional median income to apply for a tax increment financing (TIF) grant that would pay for up to 25 percent of the cost of purchasing and rehabilitating an empty residential property. Single-family empty homes or units in condo and cooperative buildings with four units or fewer are eligible. The empty homes must be located in a TIF district and must be in need of...
Post a Comment
Read more