When Real Estate Agents Refer Lenders

Choosing the right lender for your home purchase is important. Your real estate agent knows this, which is why we take a keen interest in helping you explore the financial landscape of homeownership. 

Contrary to any notion of financial gain, real estate agents refer lenders with one goal. We want to secure the best possible outcome for you. 

Keep reading to learn more about why agents advocate for specific lenders. 

Why Do Real Estate Agents Refer Lenders? 

Real estate agents frequently recommend lenders to their clients. Agents don’t make these suggestions for financial gain. In fact, loan officers don’t compensate agents for referring clients to them. 

However, there are reasons why we care about which lender you choose. 

1. We want to make sure you secure a reliable lender when you get a mortgage. 

We have seen situations where deals failed due to the lender’s shortcomings. Hence, we prioritize connecting you with a lender for a seamless process.

2. When we recommend a lender, it means we have worked together successfully before. We want to keep our good reputation and avoid problems with deals falling apart at the last minute. 

Using a lender recommended by your agent has many benefits: 

• Streamlined process: The lender suggested by your agent is well-versed in the local market. They know what’s needed to get your loan approved quickly. This means less paperwork and waiting, so you can move into your new home faster. 

• Convenience:  Your agent has already worked hard to find a trustworthy lender. This saves you time and energy. 

• Trust and reliability: You can trust the lender’s expertise because your agent has thoroughly vetted them. 

• Tailored loan options: The lender your agent suggests understands that every homebuyer is unique. They provide a variety of loan options to fit your needs. Your agent knows your preferences and financial goals, so they’ll connect you with a lender for your ideal loan solution. 

• Better communication: With prior collaboration, your agent and lender understand each other’s expectations. This means they can address any problem quickly. 

You don’t have to use the lender your agent suggests, but it can give you peace of mind. The lender is likely experienced and committed to helping you achieve your homeownership goals. 

Qualities to Look for in a Referred Lender 

Here are factors to consider: 

1. Interest Rates 

Check the interest rates different lenders offer. Even a minor variation can affect your monthly mortgage payments. 

Look for lenders with competitive rates. But be cautious of lenders offering unusually low rates– sometimes, they have hidden fees or unfavorable terms. 

2. Loan options 

Every homebuyer’s financial circumstances are unique, so find a lender with diverse loan options. Consider the loan types available, such as conventional mortgages or FHA loans. 

3. Customer service 

Buying a home is confusing for first-time buyers. That’s why it’s important to prioritize lenders known for exceptional customer service. Pay attention to their responsiveness to inquiries and willingness to provide thorough explanations.

4. Transparent fees and costs 

Buying a home costs money, and your lender should be upfront about the fees. Beware of lenders who are not forthcoming about potential expenses. 

Can I Still Choose My Own Lender? 

Yes! You can choose your own lender, regardless of your agent’s suggestions. 

You can explore different lenders to find the most favorable terms and conditions. Compare interest rates, loan terms, customer service, and industry reputation. Since obtaining a mortgage is a financial commitment, choosing a lender you have full confidence in is crucial. 

Inform your agent if you have a preferred lender or prefer to search independently. A proficient agent will respect your choices.

What Questions to Ask When Interviewing a Lender? 

1. Can we negotiate the interest rates, loan terms, fees, and closing costs? 
2. Do you give discounts for home inspections or setting up automatic payments? 
3. Will I have to get private mortgage insurance (PMI), and how much will it cost?  
4. How long does it usually take to get approved for the loan? 
5. Have you dealt with situations like mine before? 
6. Can you break down all the closing costs for me? 
7. What kinds of loans do you offer, and which is best for me? 
8. Can you explain the loan process to me step by step? 
9. How does your interest rate lock policy work? 
10. Are there any rewards or benefits for paying off the loan early? 
11. Can you provide references or share customer testimonials? 
12. What communication channels do you prefer? 
13. What are the minimum down payment requirements for the loan programs you offer? 
14. What documentation will be required for the loan application? 
15. What is your policy regarding late payments? 
16. How do you handle escrow accounts? 

What Do I Need to Know Before Talking to a Lender?

Before you talk to a lender, there are some important things you should do: 

1. Strengthen your credit score

Your credit score is essential when you’re in the market for a mortgage. It tells banks how reliable you are with money and affects the interest rates they offer you.

Get a copy of your credit report and identify any inaccuracies. If you find any errors, fix them right away. Also, pay your bills on time and reduce your outstanding debts. 

Avoid applying for new credit cards because that can lower your score. 

2. Determine your budget 

Assess your income, expenses, and anticipated homeownership costs. Consider potential home expenses: down payment, closing costs, taxes, insurance, and maintenance. 

This helps you set a realistic budget and find homes you can afford. 

3. Understand mortgage options 

There are different types of mortgages out there, each with its own pros and cons. Some have fixed rates, while others have adjustable rates. There are also FHA loans for first-time buyers or VA loans for veterans.

4. Compare lender offers 

Shop around for the best mortgage deal. Compare offers from various lenders to find the most favorable terms. 

5. Prepare documentation 

Before meeting with your lender, prepare all necessary paperwork for your mortgage application. This usually includes proof of income, tax returns, and bank statements. This demonstrates your readiness and commitment as a serious homebuyer. 

If you’re in the market for a home in Charlotte NC, and need help finding a reputable lender, look no further. Contact me, Nancy Braun, Broker-In-Charge/Owner of Showcase Realty, LLC, at 704-286-9844.