A new national study just released shows that nearly 50% of homebuyers make the decision on which lender to finance their purchase, using their realtor’s recommendation.
So instead of shopping around for a lender, homebuyers are influenced by their agent to use the lender of the realtor’s choice-- for better or for worse. Realtors want speed and reliability from a lender and usually establish relationships with lenders who offer both. The downside to that might be that the lender does not offer the lowest rates or the best terms for the borrower.
Just blindly going with the referred bank or lender clearly isn’t wise, because when it comes down to it, you really won’t know how competitive they are, unless you shop your loan elsewhere. Often times when a buyer makes an offer on a home, the real estate agent will ask them to get pre-approved with the recommended “preferred lender.” While it may be in your best interest to get the pre-approval to show you’re very serious about buying the property, the buyer doesn’t need to use that lender to obtain your financing. You can still shop that mortgage around for the best rates and terms. Now, we are not in the slightest saying not to use the realtor’s preferred lender, just to be prudent and get other quotes.
Using a mortgage broker like indigo Mortgage can mean the difference of .25 to .5 % in the interest rate, which over the life of the mortgage, can save the borrower thousands of dollars. If it’s an FHA or VA loan, the borrower can also see a swing of several thousand dollars in lender-paid closing costs, again saving you money.
A mortgage broker has access to several different lenders so the buyers’ chance of getting the best rate and getting their loan closed is much greater. Remember, It’s actually best to start with a lender before even contacting a real estate agent or looking for homes because this way the borrower can be approved for a certain level of mortgage, and will have full knowledge of their loan before they make an offer.
For questions about selecting a mortgage lender, contact Indigo Mortgage in Albuquerque, NM at 505-836-5700. Indigo Mortgage offers five mortgage divisions including Residential, VA Loans, Reverse Mortgages, Construction, and Commercial. They are licensed by the Nationwide Mortgage Licensing System (NMLS #188348), and can provide loans anywhere in New Mexico.