Right now is a scary time for borrowers. After the recent meltdown that shook the housing market, borrowers were left with a bad taste in their mouth of predatory lending practices. The good news is that the meltdown left only the strong to survive. Most lenders that endured the fallout are the ones who were engaged in ethical business practices and have active services to offer borrowers who need some honesty. Here is a little guideline when it comes to choosing a trustworthy lender.
When searching for a lender without any knowledge of the local businesses, it is always a good idea to get good referrals from people you trust. Friends, co-workers, neighbors or relatives are good examples of people who can direct you to trustworthy lenders. Once you come across a few lenders you could like to pursue, check them out on the Better Business Bureau’s website to see if they have any complaints or what kind of rating they received. Bank and Credit Unions also have safety ratings that can be checked to investigate a company.
One of the most important things to pay attention to regarding a lending company is their licensing and certificates. All lending companies are required to be licensed and if they are not, that means they are not legal to originate loans. The National Mortgage Licensing System and Registry (NMLS) has a searchable database to see if a company is licensed. NMLS is part of the SAFE Act of 2008 that requires all companies to have a criminal background and credit check. Certificates and education are just as important as licensing because any kind of certification, such as the CMPS or CRMS, indicates that the company has sturdy ties and dedication to the industry.
Once you meet with a few lending companies, it is important to ask the right questions to make sure you receive all the information you need to make a wise decision regarding your financial future. Make sure to inquire the following:
1. How long they have been in business
2. What experience they have with the particular type of lending service you need
3. If they have ever had to buy back a loan
4. What percentage of returning customers they have
5. If they can accurately describe and explain the current industry trends and how they pertain to your situation
6. If they can explain to you what all the fees on the Good Faith Estimate refer to
Never let a lending company charge you upfront fees as this is illegal. Follow these guidelines and you will be sure to find a lending company that you feel comfortable with and that will explain the entire process to you. Visit our website if you would like to learn more about our ethical business practices and if we can help you in your next real estate endeavor.
No comments:
Post a Comment