Kristine Dugan, ABR, BS, CRS, SFR
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Loan Professionals Don't Matter when you are Buying a Home
Posted on May 2, 2010
I recent had a very interesting conversation with a colleague regarding the importance of loan professionals in transaction where a buyer is purchasing a home. The conversation went something like this...
The average consumer spends 6 hours researching a computer before they purchase, 4 hours researching a car before they purchase and 2 hours research a home loan before they move forward looking for a home. The research was done by the Wall Street Journal and the article's argument was that loan professionals do not contribute much to a home buying transaction.
This particular colleague agreed with the WSJ article. I will agree to disagree with the WSJ article and my colleague. In my experience, the loan professional is the single most important person in a home purchasing transaction.
Consider the two items noted below:
- The number one item that contributes to affordability when a consumer is purchasing a loan is the interest rate - if the interest rate is 1% higher for a consumer, it could very well be the difference of payment of $100 a month which could mean purchasing a home and not being able to purchase. Who is in charge of keeping an eye on interest rates and informing the buyer if rates are on the rise and they need to lock - the loan professional.
- Picture this, you as a buyer find the perfect home, the home of your dreams. Your real estate professional negotiates a stellar contract and the seller delightfully accepts it. The home purchase moves forward and escrow is opened, inspection is completed, appraisal is done - the only thing left to wait on is the loan professional to do their job - finance the home. If the loan professional does not complete this step, all of the above is completed in vain. Time, energy, and the buyer's money is at stake if a loan professional does not do their job qualifying the buyer before the offer is made and follow through with their commitment to complete the loan on time.
Considering that a home purchase is the largest financial commitment a consumer can make, the figures presented in the WSJ are startling to me. As a buyer, make sure you are researching and qualifying the loan professionals you are interviewing. They are providing YOU with a service so make sure they know what they are talking about. They should ask you questions, they should find out your financial needs and future financial goals. They should provide you options and educate you on the current market conditions. If you would like a list of questions to ask while you are interviewing, feel free to email me and I can forward information to you.
In closing, I found this video below of "Dave's Story" of how he found his loan professional - It provides a little humor and education of the process - Enjoy!
Don't work with Frankie - The Story of Dave from Dustin Hughes on Vimeo.
Comment Posted on "Loan Professionals Don't Matter when you are Buying a Home"
1.
Michael RodriguezPosted May 2, 2010 8:40 PM
Excellent post - the one thing that I have learned in my 10 years of service in the mortgage industry is that advice matters. To put this into perspective a .25% difference in interest rate on a 200K loan will make a 15K difference in interest over 30 years. It pays to know that your Loan Officer knows why and how interest rates move.
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