Having lenders compete : Rooftop Views

Rooftop Views

Having lenders compete

We've all seen those commercials where lenders will complete for your business. A mortgage broker we know pokes his head behind the curtain.

Steve Ervin, President of The Owner & Buyer Connection says, "People THINK that those loan requests are submitted to hundreds of lenders and the best four make it to their in box. Nothing could be further from the truth."

It seems that lenders pay for those leads. It one lender pays a premium, only that lender will get the lead. The lead will only be submitted to up to four different lenders. The quote given to the potential buyer has not been screened in any way. It is up to the buyer to decide if that quote makes sense for them.

Problem is, lots of times the buyer gets to the closing table and the quote they thought they had is not what is on the final loan documents. We have been the listing agent (and thus had no input) on occasions where the buyer and the buyer's real estate agent were totally stunned by the loan terms they were asked to sign at the closing. Interest rates were higher, the down payment was much more than they thought they had agreed to. All in all, it's not a pretty picture.

If you're thinking of buying real estate, go to a lender you know or has been recommended by your real estate agent. They are usually local and have a track record of completed transactions. Internet lenders have no allegiance to anyone and don't have to answer to anyone. Buyer beware!

Remember, if it's too good to be true, it usually is.