When shopping around for a lender to do a refinance or home purchase with, most people have been trained to look for the "best rate with lowest costs". I am writing this to dispel certain beliefs and some important things to keep in mind when considering a home purchase or refinance.

First off is the "lowest rate". Stay away from lenders who are quick to quote you a concrete rate and payment. In my experience in picking up the pieces when other lenders cannot CLOSE the loan, they are the Loan Officers and banks that are just fishing for business. What I mean by this is they take advantage that potential borrowers think the lowest rate is the best deal and try to woo in as many borrowers as possible, take the application without doing the proper research, do not go over ALL options with the borrower, and throw the application against the wall and hope it sticks. This usually results in an appraisal coming in low, the loan program being switched around in an effort to do ANYTHING for the borrower at all, or getting turned down for Debt-to-income ratios. Just last week, I had a borrower come to me that was working on a purchase for 3 months and ultimately getting turned down for debt-to-income ratio. With the purchase contract ending in 10 days, he was incredibly stressed. We turned around and got the purchase loan done just in time of the closing date. This couldve been entirely avoided if a reputable loan officer and lender had been selected.

The next topic is costs. Customers want 0 closing costs. This is entirely understandable because who would call a lender up for a refinance or purchase and WANT costs? In some cases it is a necessary evil, and being a lender that can offer a NO cost loan in certain scenarios, I will not steer a borrower in the wrong direction as so many companies do when they offer no cost loans to everyone and cannot deliver. Does the bank charge points, do they make you pay an upfront application fee, do they make you pay for the appraisal upfront, do they go over the process from start to finish well so you have reasonable expectations, do they explain thoroughly what each costs is if any? These are some things everyone should be asking/keeping in mind when looking for lenders.

Lastly is to ask and get an honest answer on what could be potential problems with the loan. Ask what loan-to-value limitations the lender has. If the appraisal comes back low is there additional costs or PMI charges? If I have a borrower that is weighing options and one lender is offering a 3.75% with PMI and I am offering a 4% with NO PMI which is the logical answer? The 4% should be a no brainer if the PMI stays on the loan and the borrower doesn't plan on moving. But borrowers tend to look at the lowest rate and costs when it may not be the best option for them. A refinance is you do not plan on living in the home for much longer may or may not make sense, the loan officer is not living your daily life and does not understand your personal goals until they ask! Can the loan officer close a BENEFICIAL loan for you, or will it be a waste of time! The only way to find out is to ask!!!

Keep this in mind when choosing lenders and loan officers!!