The Myth’s of Getting A Loan

Nov 30, 2007 - 15:19 PM PST
In my opinion finding a good loan officer is key in having a good experience when buying a home. Here are the Myths and Realities of looking for a Good Loan and a professional to help.

Myth #1 Pick the loan officer with the best rate.
Reality* although there is a certain amount of shopping you will need to do. If someone is offering a rate no one can match, this may be a sign to watch out. There are loan officer that will tell you what you want to hear up front and at the 11th hour when your emotionally and financially committed in to the transaction will give you an excuse on why you have to pay a higher rate. And guess what, it’s never their fault. What you can do to help protect yourself? If you decide to work with them let them know you will be loyal as long as they keep their word. Verify that you can lock in that rate that day and just don’t look at the rate, look at the fees as well.

Myth #2 Zero points mean I’m not paying for the loan.
Reality* Zero points means no out of pocket cost, however the lender gives you a higher rate because the lender still has to pay the loan officer and cover fees. If cash is a challenge for you, zero point’s might be the way to go, however remember, your still paying in the increased monthly payments.

Myth #3 If I go to the bank I will get a better deal.
Reality* Loan Brokers/Officers are generally the best way to go. They shop for the best loans and rates. They not only look at the loans that the banks offer but they look at other lenders as well. If you go to the Bank first they will try to get you into their products first which may not be the best for you. I also find that Loan Brokers/ Officers are more eager to please because they often have to earn their business versus having the luxury of being set up right in the bank and they only get paid when the loan funds so it’s in their best interest to get the job done.

I want to give you one last piece of advice. Look for an experienced loan officer or loan broker with a license. Believe it or not there are people who do loans with no license. Having an experienced person working on the loan is important because a multitude of challenges will come up and you want someone with the experience to see this in advance. When issues arise, you want someone with the knowledge to overcome them. You would be very surprised to see what type of conditions need to be met in order to get the loan closed on time, if at all. And sometimes these conditions can spring up in the middle or the end of an escrow. A good, experienced loan officer will look into your situation and will find loans programs based on your individual needs.

The Myth’s of Getting A Loan


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2 Comments

Jun 02, 2008 - 21:08 PM

avkrules on
thx for putting this information up... just the kinda stuff I was looking for.
Mar 17, 2008 - 14:24 PM

ietc1704 on
Hi there,
I was reading your comments about real state loan. I think you are totally right. I'm goingthru that process right now. I'm looking for a place to buy and therea are so many things to look at, not just the place itself, but all the fees and all those fancy words that you hear from the morgage person from the real state it's pretty scaring at least for me. I'm a first time buyer and I don't want to make any mistakes or bad decisions, so I'm a little bit strees out for this.
Thanks for your comments........