Feb 201502

How to ensure a smooth financing process when you buy a home

Feb 201502

How to ensure a smooth financing process when you buy a home

By Jeffrey S. Detwiler, President and Chief Operating Officer, The Long & Foster Companies

While home buyers each want something different when it comes to the home of their dreams, every buyer, real estate agent and seller share one common desire: for the buyers’ mortgage to go through smoothly and on time. Most agents recommend a few lenders to their buyers who they know are reliable, will help their buyers find the right product at the right price and will get the buyer to settlement within their desired timeline.

Relationships between real estate agents and lenders are crucial for buyers and sellers because financing is the glue that holds together a deal. Mortgage financing, though, is not always a simple task, and it could become more challenging as new regulations go into effect. However, many real estate brokerages have a lender who operates out of their office and can work with agents to arrange financing for their buyers while they search for a home. Also known as in-house lenders, these types of mortgage companies can provide one-stop shopping for home buyers.

While there are benefits to working with in-house lenders, buyers always have the option of choosing their mortgage lender. In fact, buyers are encouraged to shop around. Federal law prohibits real estate agents from requiring clients to use a specific lender and agents are not allowed to accept any payment for referrals. When buyers get a referral from a real estate agent to a lender, they can ask about the relationship between the agent and the lender to ensure they are comfortable with the arrangement. A good real estate professional should disclose this information without prompting.

Real estate agents and buyers typically want their mortgage lenders to provide excellent customer service in several ways: clear communication and coordination between all involved parties, sound financial guidance, competitive pricing, rates and fees, and, above all, an on-time and hassle-free settlement. They also want to ensure any possible issues are prioritized correctly, everyone involved has the necessary paperwork at least 24 to 48 hours before closing, and the loan is prepared before settlement.

Communicate with your mortgage lender frequently for a speedy settlement

While most mortgage lenders try to turn loans around within the buyers’ desired time frame, loan officers at in-house mortgage companies have the benefit of working as a close coordinated team with their affiliated agents. They also have the advantage of daily contact with agents to customize loans to the buyers’ needs and move loan applications forward, prioritizing those transactions. Loan officers who work closely with agents are more likely to communicate frequently with their underwriters and appraisers to ensure every step toward settlement is taken as quickly as possible.

Additionally, most in-house lenders have a formalized method of communication with buyers and their agents. The buyers’ personal financial information is confidential between them and their mortgage consultant, but agents can be updated on the progress of their clients’ loan application. In-house lenders, like all mortgage lenders, rely on underwriters to approve a loan, but the additional level and frequency of communication between mortgage consultants, real estate agents and buyers can prevent last-minute issues from delaying a settlement.

Get the information you need to make an educated decision about your home and mortgage

Buyers often want their mortgage lender to function as a financial consultant, and one of the benefits of an in-house lender is the ability for a prospective buyer to meet with a real estate agent and a mortgage consultant in the same office on the same day. A mortgage consultant can educate buyers on the complexities of home loan options and how to qualify for a loan. Buyers who face challenges when qualifying for a loan can get guidance on how to improve their credit or advice on how to gather funds for a down payment.

All buyers need to be preapproved for a mortgage loan before they begin house-shopping to know their price range and if they can finance a new property. Shopping for a home without a preapproval can result in would-be buyers falling in love with a home they cannot afford or having their offer rejected because of uncertainty of their ability to finalize the sale. Additionally, some sellers will not accept offers without a prequalification letter, so prospective buyers should come prepared with their mortgage preapproval amount and prequalification letter.

Additionally, buyers who work with in-house mortgage consultants will find someone who knows the local real estate market as well as loan products and programs that meet the buyers’ needs. Some buyers find that as they begin the house-hunting process they want to increase their price range to find more available homes. A quick call to an in-house lender can provide an immediate answer to whether the buyers can comfortably qualify for a larger loan.

Do your research to make sure you receive the lowest rates and fees

While the benefits of one-stop shopping and high levels of customer service are important reasons to choose an in-house lender, buyers should always compare interest rates and fees. Many in-house lenders can reduce their fees because they employ more efficient methods of customer acquisition. Additionally, many offer more competitive rates thanks to the volume of loans they close. When working with an in-house lender, buyers can concurrently discuss their housing search with their real estate agent and their loan options to find the right loan and home for their needs.

Before you begin your home search or look for a mortgage lender, contact a Long & Foster sales associate and speak to a representative from Prosperity Home Mortgage, Long & Foster’s in-house lender. Prosperity offers a wide range of mortgage products, including fixed and adjustable rate mortgages, jumbo loans, renovation financing and FHA programs. Long & Foster offices are located in across the Mid-Atlantic and Northeast, and the majority of these locations have an in-house mortgage consultant from Prosperity who can work with your agent for a streamlined real estate transaction.

One-stop shopping at Long & Foster includes more than working with an agent and a mortgage consultant. Long & Foster’s multiple services also include homeowner’s insurance, settlement services, property management and corporate relocation services. Additionally, all Long & Foster agents have an array of local, trusted resources such as moving companies they can recommend to make every move as smooth as possible. No matter what you need, the Long & Foster team will go above and beyond to help you achieve your homeownership dreams.

About the author
Jeffrey S. DetwilerJeffrey S. Detwiler is president and chief operating officer of The Long & Foster Companies, parent company to Long & Foster Real Estate, Inc., the largest independent real estate company in the United States, and Prosperity Home Mortgage, a full-service mortgage banker. From extensive, neighborhood-level market information to Long & Foster’s core services companies, providing mortgage, settlement, insurance and property management services in a streamlined manner, Long & Foster offers the services necessary to make today’s real estate transactions manageable for owners and investors.