Real Estate Investing

I want to preface this by saying that I have worked with many really fabulous lenders in the five years I’ve been in real estate.  My favorites are the ones who are no-nonsense.  If they can qualify someone, they do.  If they can’t, they say that they can not up front without any pain and suffering of disappointment, discouragement, or near-misses in-between.

Sometimes bad lender CAN close on a mortgage, but often they don’t make it easy or desirable to work with them again.  Here are some of the tell-tale signs that you perhaps stumbled upon a bad lender.

1. Your agent sucks in air through their teeth when they hear the name of your lender.
2. You are told that bad credit is not a problem.  They’ll figure out how to find you a loan even though your credit is so bad you wouldn’t give yourself a loan (you’ve never paid a bill on time).
3. When you compare the bad lender’s good faith estimate to that of other lenders, there are *interesting* administration fees that can’t be explained.
4. You have great credit, good job, and are completely eligible in every way.  Yet the lender quotes you rates higher than another lender, higher closing fees.
5. You have a clear to close and tell the lender the date you want to close.  However, your words are not heard.  As a result, you close two days after you requested closing date*.
6. The lender uses the mirror test to qualify someone for a loan (”Are they breathing? We’ll git ‘em a loan!”)
7. Lender will not return your phone call to keep the agent nor the client informed about what’s going on.
8. Seems to work on the loan the day before closing.
9. The lender encourages you to lie on his loan application and credit “is done all the time.”  This is not done all the time and, in fact, is fraudulent lending.
10. The lender is using high-pressure tactics with you, urging you to sign now.

I highly recommend that if you’re considering a home purchase, find a lender in your own area - not one giving you a loan from a thousand miles away.  You want a lender that you can sit eyeball-to-eyeball with to review your good faith estimate in a way that’s understandable and professional.

Here is a link to Lenders Haven which has some really great lending advice.  Or don’t forget to visit the mortgage side of Banks.com for more interesting articles.

*Can you tell I’m not very happy with a lender today?