My clients appreciate that I always tell them the truth and advise them accurately. What I tell them is not always what they want to hear; but it IS what they need to hear. Yet, every once in a while, I come across a borrower who doesn’t like my advice and continues to shop until they find someone who tells them what they want to hear.
I recently read an article published in the National Mortgage News. It was written by Amy Tierce, Branch Manager of Fairway Independent Mortgage in Needham, MA. The information in her article is so relevant to everyone in the market for a mortgage, that I’ve republished it here:
It’s Important to Shop for the Truth,
NOT for the Answer You Want!
Today is the buyer’s contract expiration date… but the lender has not issued a commitment; in fact they are declining the loan!!! That’s because the buyer does not qualify for the purchase, (which is what we told him when he came to us for the loan). He is self-employed and we suggested he come back after filing his most recent year of tax returns, as his income would be higher.
The buyer decided he didn’t like that answer and went to another lender where he was pre-approved. He then made an offer to buy a property, spent money on the inspection and the appraisal, and…guess what? The buyer does not qualify and he will not be approved.
How does a consumer differentiate between information provided by two presumably professional lenders?
How does a buyer determine who is telling the truth?
You may recall Reggie Lewis, star basketball player and the 1987 number one draft pick for the Celtics. He had a heart condition and one team of doctors told him that he should never play basketball again. He sought a second opinion because he did not like that first answer. He dropped dead from a heart attack during practice.
Just because you don’t like the answer does not mean that the answer is wrong.
- Have the lender walk you through exactly how they arrived at your numbers.
- Ask for details – get the why.
- Use the information gained with the first lender when interviewing the second. Ask, “Why can you do this when the other lender said that it could not be done?” Then carefully consider the answer.
- You can take that answer back to the first lender if you think that will help you gain clarity.
- In light of differing opinions, get a third.
Regulators are trying to create a mortgage system where the consumer cannot get hurt; but that’s simply not possible. All industries have good and bad players and varying levels of professional competency. No amount of regulation is going to change that.
Consumers should be smart, educated, and shop responsibly. Don’t just shop for the lowest rate or the answer you want to hear. (If someone quotes you a rate that’s much better than other lenders, chances are it’s not a real quote.) Shop for competency and knowledge of the marketplace.
Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.