If you’ve decided to buy real estate you’ll likely already know you’re going to see the most property with the services of a real estate agent. You may need a mortgage in which case you need a loan originator. Also known as lender, loan officer, mortgage guy or girl, bank, whatever you like to refer to them as.
Loan Originators – These days most work for banks, some high street based even your own bank; some not so main stream but they usually specialize in mortgages rather than checking accounts, so locations are a little different. Your loan originator can get you pre-approved, accept your formal application and spend a lot of time making sure you get to the closing table on time.
Choosing wisely means the difference between a smooth transaction and one fraught with delays. Today I want to address loan originators and your mortgage contingency date.
On your purchase agreement to buy the house is a date called your mortgage contingency date. As your real estate agent we understand how to arrive at a date that is good for you, the property seller and the loan company. It gives enough time to get your mortgage approved but gives the property seller confidence he’ll know when all is ready. We refer to the contingency as a clear to close, because the loan company has said yes, let’s turn these buyers into owners, the funds are ready!
A Real Tale of Two Loan Originators.
In February I had a very busy weekend and worked with two buyers that had offers on houses accepted.
Case One: – Contract mid Feb, Mortgage Contingency mid Mar, Closing mid April. Everything was done in time, the clear to close came through a few days ahead of time. We are ready to close.
Case Two: – Contract mid Feb, Mortgage Contingency late March, Closing end April. Everything about the loan is late. We are two days away from the deadline for mortgage contingency. I am not sure if we will get that clear to close.
For case one there’s very little stress. The buyers are ready, the sellers are happy.
For case two everyone is sitting on the edge of their seats wondering what’s going to happen.
If the mortgage does not come through in time the buyers attorney will try to get an idea of how long it will take, a day, a few days, a week or more, and why. Then he’ll communicate with the sellers attorney and ask for an extension. Here’s the kicker – Although in most cases these extensions are agreed upon, there’s no guarantee. The seller might say no and put his house back on the market!
Picking the right loan originator can make the difference. As your real estate agent I’ve given the loan guy more than enough time on your contract to get the job done. If he doesn’t and then I get a care less attitude about it, well that makes me mad and I am sure it will do more than that to you.
Select very wisely. How can you do that?
- Heed the advice of your agent. We work with a select number of loan officers because we know they’ll get the job done. They’ve done it over and over for us and they keep us informed all the way to closing.
- Don’t go online and select from people bidding for your business. They are all about the paycheck and nothing about you, they don’t even know you!
- Referrals can be more risky. Is it wise to take a referral from someone not in the industry? I am not saying no, but it inherently carries more risk as the referrer knows nothing about your deal and your circumstances. Their loan originator may not be the best choice for you.
- Find the specialist. Some loan originators specialize in jumbo loans (large amounts), others in FHA, renovation and so on. Make sure they have experience in your type of loan.
Did you know that one of the most common reasons home purchases fail is the finance contingency?
Another reason to pick very wisely. If it’s too easy to get your pre-approval, I’ll have doubts the guy is doing much of a job at all, let alone a good one. You’ve worked very hard to get to this point, make sure you’re loan originator works hard to get you the right approval and then the loan.
As a final thought to help you understand, it’s true that every loan is different. Just as your purchase is different, you are different and your finances are different. Some loan approvals can be quick and some take a little longer. I’ve had approvals issued in three weeks and some in five. I understand these variations and will structure the dates on your offer to give ample time for all mortgage approvals to be attained.
Contact us if you need a good loan originator. We’re here to help you buy your next home too. Call Corinne 847-363-3686.