Shopping: How to Tell If Your Lender Is Experienced

By Francine L. Huff
Mortgage Credit Problems Columnist

Debt consolidation, mortgage loan, and refinance companies are a dime a dozen. So how do you know you're working with an experienced lender? Here are some important questions to consider before giving a lender your business.

What's the Company's Track Record?

True professionals will see the value of building solid reputations in order to get word-of-mouth referrals. Ask people you know for the names of debt consolidation, mortgage loan, and refinance companies they've used to find an experienced lender. Check with your local chamber of commerce or other business organizations to find established firms in your community. Look online to compare offers and make sure you get a fair one.

Licensed to Lend

Depending on where you live, licensing requirements for lenders may be very strict to non-existent. Loan officers in some states can even have criminal records! Before committing to a debt consolidation or mortgage loan with anyone, check with the local licensing authority to make sure your lender and loan agent are in good standing. Poorly managed or new lenders are more likely to go out of business or skirt regulations in tough economic times.

Can the Agent Explain Mortgage Interest Rates and Program Options?

An experienced loan agent will understand and be able to explain to you exactly how your mortgage interest rate is calculated. Interest rate quotes are determined by movements in financial markets, supply and demand in your area, and you yourself--your equity, income, and assets, and especially your credit rating. In other words, riskier borrowers pay higher rates. Avoid lenders who are unable to explain how your mortgage might be affected by these factors and what you can do to get the best rate on your loan.A good loan officer should be able to walk you through all the steps of the loan process. He or she will be able to explain eligibility requirements, documents needed, and the various loan products available. If you qualify, you should be prequalified or preapproved for a mortgage or refinance within a few days.

Should You Use an Online Mortgage Lender?

An online service can help you find and compare experienced mortgage lenders. Make sure that even if you are referred to an established company that you check out the credentials of the individual mortgage officer assigned to work with you. Use the inquiry form on this site to find a lender who can help you with your debt consolidation, mortgage, or refinance.

Promising the Moon and Stars

Some lenders will make a lot of vague or false promises to get your business. But if it isn't in writing, it's just air. Get your required disclosures--the Truth-in-Lending and Good Faith Estimate forms. Compare offers carefully, ask your agent to explain anything you don't understand, and don't sign anything until you are comfortable with what you are getting.

Source:

• WBIR
• "Which Lender Do You Choose?" by Kristin Abouelata, www.wbir.com.

About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.

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