A Scale of Trustworthiness
“Trust me!” The last words you hear your brother say as he pushes you off the roof to the waiting trampoline below. It’s amazing how many broken bones begin with those two little words. This is a phrase heard everywhere from your Italian mother to the guy with a twenty-year-old gas station condom in his wallet. Here’s the question you should be asking yourself now, “Where on this scale of trustworthiness does my lender fall?”
How Trustworthy is My Lender?
When you sign on the dotted line for a mortgage, your lender holds your financial life in its hands. You definitely don’t want to hand your financial future over to the lending equivalent of a high school kid when Mom and Dad are gone for the weekend. Here are some suggestions on finding a trustworthy lender.
First, always get recommendations. Your neighbors, family, and friends will probably have experience with almost any lender you could end up with. Find out who has a good one and what makes them good. Remember though, that these are opinions so try to get more than one before deciding where a lender belongs on the scale of trust.
Do Some Research
Second, follow up on the recommendations you’ve collected. Check the lender names with trusted companies whose job it is to keep an eye on them. Below are the web addresses for some places you can look.
Better Business Bureau www.bbb.org
National Association of Mortgage Brokers www.namb.org
Nationwide Mortgage Licensing System and Registry www.nmlsconsumeraccess.org
Third, ask a lot of questions. I know I say this a lot, but how else can you get to know someone? For example, you’ll never know that your college boyfriend likes to dress up in drag unless you ask him, “That’s a very nice cocktail dress in the closet. Is it yours?” But make sure you ask the right questions. If you asked if the cocktail dress was for you, he’d have an easy out; even if he does have to explain why it’s a couple of sizes too big. So what kinds of questions should you be asking? Thy one of these:
- How long have you been in business?
- Have you ever had to buy a loan back?
- Do you have any experience with this exact type of transaction (this one is for when you have unusual circumstances)?
Get a Good Faith Estimate and ask them to explain it to you. I guarantee that at some point you will have a question about the loan process and all of its paperwork. If your lender can’t explain it in such a way that you can understand it then your lender is somewhat useless.
You wouldn’t let the shady looking dude your sister brought to the family reunion hold your hamburger so why would you let a shady looking lender hold the deed to your house? Get some recommendations, do your research, and ask questions. Do some work and get to know your lender before you sign your paperwork, not after.