Select a mortgage lender

How to...

Select a mortgage lender

Although it seems like mortgages are a commodity and there isn’t much difference who you work with, nothing could be further from the truth.

Working with a local, direct lender is the best choice for most borrowers. A knowledgeable and experienced loan officer will help you select and qualify for a mortgage that will work within your budget and help you achieve your financial goals. Real estate agents are highly motivated to keep transactions flowing and can be good sources of referrals for lenders with experienced loan officers who are known to get mortgages closed on time.

Element Funding is a direct lender that has a wide range of available mortgage products and that directly funds mortgages. Its team has dedicated underwriters, so the decision-making is local, not from a distance, and decisions are made rapidly. Once a home is under contract, we make a weekly update to the agents and borrowers to make sure everyone is on the same page all the way through closing.

Retail banks are another source of mortgages and anyone buying a home has a relationship with a bank. Banks offer vehicle loans as well as personal loans and business loans in addition to mortgages. Banks typically have a more limited range of mortgage options, so they are not the best source for everyone. Underwriting standards may be stricter, with more difficulty qualifying at a bank. Unlike with mortgage companies, loan officers at banks don’t have to be licensed, so mishaps are more likely.

Working with a mortgage broker is another choice; however, a broker is an intermediary between the borrower and the lending institution and has no decision-making power. Brokers collect information from the borrower and submit to one or more lenders for consideration. Underwriting is handled by the lender and there is an additional layer between the parties. This can slow down the flow of communications in a fast-moving transaction. Brokers don’t have much control over how a loan is processed, how long it will take, or if you will get final approval. This can lead to delays in closing and frustrations for all parties to the transaction.

Lenders operating online have increased their exposure with massive advertising campaigns to attract attention. Their advertisements often show homebuyers applying on their phones with an approval back in minutes. Too many people are disappointed to find out later in the process that their online approval wasn’t really valid.

The typical online lending model uses an automated, hands-off approach that has the borrower entering information via a smartphone or computer and an underwriting algorithm along with a credit check makes the decision on qualification. Consumers are usually left on their own to interpret how to answer the requests for information. As an example, data on monthly income will be requested. But how does the borrower know how to report income? It’s pretty easy if you are employed and receive a fixed salary. Someone with variable income from self-employment or with commission income may not enter the relevant information and later discover that the approval is invalid. Good underwriting practices, like review and verification of the consumer’s documentation, are not commonly done at the pre-approval stage.

Most experienced real estate agents don’t want to rely on pre-approvals from national or online lenders because they have seen too many deals blow up before closing. Agents like to have a local lender they are familiar with review the buyer’s information and issue a pre-approval based on solid underwriting practices. Element Funding is frequently called on to rescue transactions when online lenders haven’t been able to close the deal.

Selecting the right lender is a key element to a happy and low-stress real estate transaction. There are many choices available, but most borrowers will be best served by working with a local lender that will take the time to understand their financial situation and goals and counsel on the best mortgage program to achieve their goals.

Special to The Covington News

WHEN SHOPPING FOR A MORTGAGE

Make Sure You Interview The DeAnn Ellis Team

Community Leader • Deal Maker • On Time, Every Time Service Streamlined to Funding • Ranked Top 1% Nationwide Originator

www.EllisMortgageTeam.com | 1-855-ELEMENT

The DeAnn Ellis Team

1108 Clark Street | Covington, GA Office 1-855-ELEMENT Fax 404.537.1846 DeAnn Ellis | NMLS# 148916 Cell 770.616.8042 deannellis@elementfunding.com

Primary Residential Mortgage, Inc., DBA Element Funding, NMLS #3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Georgia Department of Banking and eFinance 6521. NMLS# 148916