Mortgage Secret #2, How to Choose the Right Mortgage Originator

Mortgage loans are sold as a commodity these days.

They promote the idea that a commodity, the product, is the same regardless of where you buy it, and all that makes one different than the next is the price. This may be true for commodities such as gasoline, wheat, corn, or whatever, but it is definitely not true for mortgages, although the liars in the culture will try to make you think so.

Mortgage advertising leads you to believe that there is nothing more to choosing whom to work with on your mortgage other than the interest rate and the fees. Nothing could be further from the truth.

Think about it. If the mortgage loan is the largest loan you will ever take out, if you are destined to pay thousands of dollars in mortgage interest over your lifetime (if you’re not smart), do you really only want to consider who is the lowest bidder without thinking of anything else?

Choosing your physician

That would be like choosing a doctor for a heart operation because he quoted the lowest fee even though he barely graduated from medical school at the bottom of his class. And when he quoted the price, he didn’t bother to run any tests to determine what type of surgery was really needed.

He didn’t even bother to talk with you and learn about you so he could give the right advice.

Do you really want to trust your life to a doctor who would treat your life in such a cavalier manner? Do you really want to trust your financial life to the lowest mortgage bidder?

I have taught people how to become debt-free since the mid-1990’s. While doing that, I determined there was a real need for Real Mortgage Consultants who would truly be helping their clients, not just taking orders for mortgage loans by simply quoting rates and fees.

Because the mortgage can keep you from WINNING your financial independence, I chose to become a Real Mortgage Consultant. I use mortgage financing sometimes as a tool to help people become debt-free. I also want people to make the right mortgage loan choice so that they can pay it off as quickly as possible.

Questions to choose your mortgage originator

Whether you would choose to work with me on mortgage financing or with someone else, consider these questions in making your mortgage decision. Your choice could mean a savings of tens of thousands of dollars for you.

Your choice could mean the real difference between losing or WINNING.

Are they just trying to seduce you with an interest rate?

So much mortgage advertising focuses on the interest rate. It’s as though that’s all they have to offer.

If they are focusing on rate, then it’s likely that’s all they care about, and they are not likely to help you make intelligent, informed financial decisions.

Since your mortgage is the single largest loan you will probably take on in your lifetime, this financial advice is important.

Beware of a rate that seems unrealistically low or is too good to be true.

Sadly, I have had mortgage clients who responded to another company’s advertised super-low rate only to learn when inquiring that there were unrealistic conditions or that it was for a loan program not in their best interest.

Often these rates are advertised with no intention that the customer will actually get that rate, but only to lure them in and then change them to something else.

In the past, sometimes this didn’t become obvious until it was time to sign the closing papers when it may be too late for the customers to change their mind. Under the new closing rules you now are legally required to have three days to review the documents before you sign.

It is not nearly as important to shop rates, as it is to shop for a reputable lender.

Beware of a company that focuses primarily on interest rate.

Will they clearly explain how interest rates and closing costs really work as well as all other aspects of your financing?

In my seminars, when I ask how many people really understood the loan process when getting mortgage financing, most people respond that they did not understand the details.

Unfortunately, most average mortgage loan officers do not take the time to explain the process so that it is understood. They are primarily interested in getting you to sign so they can move on to their next paycheck.

Be certain to work with someone who is interested in truly helping you and will make the effort for you to understand what you are doing.

Will they recommend a loan amount that is truly in your best interest?

Or instead, are they only trying to get you approved for the largest loan amount possible so they can make more money?

There is often a difference between the loan amount a client can be approved for, and the loan amount that is actually in their best interest. This is particularly true when buying a home.

I have worked with many clients where I was able to obtain a pre-approval for a higher loan amount than I recommend. If you buy a home for the highest loan amount possible, then your money will be stretched so thin that if one little thing goes wrong, financial disaster is next.

Even if one little thing does not go wrong, borrowing the maximum loan amount will make it impossible for you to do anything other than what the lender wants: pay on the mortgage for 30 years and pay them hundreds of thousands of dollars in interest you should be keeping for yourself.

Be certain to work with someone who will recommend the right loan amount for you, not the highest possible loan amount that will make them more money.

Will they work with you long-term if necessary, or are they just after the quick paycheck?

Sometimes a client’s financial situation is such that they cannot be approved for mortgage financing right away – or they cannot be approved for the loan program that is in their best interest.

It is important to be sure that the loan originator is willing to help you for as long as it takes.

Also, be sure that they are not recommending a loan program that is not in your best interest when, with a little more effort, you could be approved for a better program for you.

I have worked with clients for a year or more to help them get in position to buy a home.

Since most income earned in the mortgage industry is commission-based, this means that there is no payment for the work until the final mortgage papers are signed. Some loan officers only care about today’s paycheck, not truly helping the client to succeed if it means that getting paid will be delayed a year or more.

Make sure that you work with someone who knows that the best way for them to succeed financially is to be truly interested in helping you.

Will they compare various loan options side by side?

What type of loan program should you get? There are so many options out there, Fixed Mortgage, Adjustable Rate Mortgage, Balloon Mortgage, and so forth.

Should you pay discount points? How about closing costs? The right choices will be different for each person.

A Real Mortgage Consultant will help you consider multiple options and programs. You should receive a detailed side-by-side comparison of different options to help you decide which choice is best for you.

Be sure to ask for this detailed analysis.

Can they help you make an intelligent decision on when to lock an interest rate?

Deciding when to lock in a mortgage rate can be difficult.

Even though the interest rate is not the most important factor in getting mortgage financing, it is still better to get a lower rate if possible.

This doesn’t mean that you should try for the absolute rock-bottom lowest rate; it’s not worth it, and you may actually end up with a higher rate than would have otherwise been necessary.

Many people will float, trying to guess when rates have hit bottom. Unfortunately, a lot of times they will wait too long and end up with a much higher interest rate. There is nothing wrong with floating but keep a close eye on economic indicators.

Mortgage interest rates are determined by mortgage-backed securities. The best information available on what is likely to happen with mortgage interest rates comes from tracking the bond market by each minute, hour and day.

Be certain to work with a good mortgage advisor who is tracking the mortgage bond market continuously and can help you make an informed decision when to lock.

Will they give you a real pre-approval, or just a pre-qualification?

It is important to know the difference.

Sometimes what people get is only a pre-qualification rather than a pre-approval.

A pre-qualification is not as good – it is merely one person’s opinion on whether you might be able to buy a home, often based only on information over the telephone.

With a real pre-approval from a Real Mortgage Consultant, your credit and income are checked out ahead of time and your financial information is sent through an automated underwriting system.

A pre-approval will still be subject to a final underwriting review, including the appraisal, marketable title, etc. A real pre-approval from a Real Mortgage Consultant is the closest you can come to actually having the money in hand before buying a house.

You should actually receive a pre-approval letter from your Real Mortgage Consultant and the mortgage company. With this letter, you can show your real estate agent or the seller that you have been pre-approved up to a certain loan amount.

Don’t get an unpleasant surprise – be certain that you receive an actual real pre-approval, not just a pre-qualification.

Will they also help you with a loan payment freedom plan?

When you are shopping for mortgage financing, very likely no one will mention that you could potentially pay off a 30-year mortgage and all your other loans in about 6-10 years on your current income – and do it while living a normal life, if you only knew how.

If the mortgage originator you are working with can’t tell you how to do this, or has no clue about it, choose someone who can. This is important, because it can save you tens or hundreds of thousands of dollars in interest that you have to earn and would otherwise pay to creditors.

Of course, this is my purpose as a Real Mortgage Consultant assisting people on their mortgage financing. I use that financing as a tool to help them become completely free of all debts as more quickly than they might imagine.

Be sure to work with someone who will give you a personalized written plan of how you can be free from debt.

Who you work with on your mortgage makes a huge difference to you

You simply can’t afford to choose your mortgage based on the interest rate and fees without paying attention to what really matters.

If you choose your mortgage by the interest rate or fees, you will lose with your mortgage and lose financially.

You only WIN when you work with a Real Mortgage Consultant, and never with just any typical run-of-the-mill loan officer.