Why Do Many Buyers Not Shop for Loans??
I pulled this article off of my RSS feed this morning and it pretty much confirmed what I already knew. The one number that was astounding is that “96% said they compare prices when shopping for anything – except mortgages. This, according to LendingTree, explains why only 28% surveyed feel confident they got the best possible deal on their loan.”
I realize that this can sometimes be a complicated process and that many buyers are concerned about providing their financial information to more than one lender. That being said, this is most likely the largest purchase most people will ever make and the ramifications will last, in most cases, for 30 years!
If, in fact, home buyers are going to continue this trend, I feel that it is up to us as Realtors to educate our clients on the impotance of “shopping their loan”. At the very least, we need to do our homework and some of the “shopping” for them to ensure that they are getting a good deal. Patti and I have a list of 5 mortgage brokers that we supply to all of our clients.We highly recommend to them that they contact at least two before making a decision, whether they are on our list or not.
I am especially concerned with clients that insist on using one of the “big box” lenders (Wells Fargo, Bank of America, Chase, etc.) just because they have the rest of their accounts their. In my experience, their offerings are very limited and, worst of all, they tend to tale a long time to process a loan which can cause numerous COE extensions and possibly lose the deal altogether.
Our biggest challenge lately has been dealing with lenders that do not seem to have any sense of urgency and treat the close of escrow date as an arbitrary number. I also am getting frustrated with Realtors, and I use that term lightly, that do not keep in constant contact with their buyer’s lender. Too many just assume the loan will get done and wait until the last minute to notify us of problems. Needless to say, we are very agressive in this area and, in most cases, we contact the lender involved before accepting any offers.
Lack of education and knowing the true terms of a loan was, in my opinion, a huge factor in the housing market crash and the subsequent distressed home situation. Too mnay people were buying homes they couldn’t afford because greedy lenders, especially those og the new home builders in my area, just wanted to get as many deals done as possible.
The new requirements for mortgage brokers should help but it scares me that this is NOT a requirement for those working for the “big boxes”!
