Family, friends and co-workers are your best sources for finding a loan officer

By Jeff Lazerson

Mortgage shopping is complicated, time-consuming and plenty tough to wrap your head around because you typically do it on such an irregular basis.

And, the stakes are high in terms of just getting approved, the amount of settlement charges you incur, how much mortgage interest you will pay over time, and overall experience satisfaction.

For example, a quarter-point interest rate difference on a $600,000 loan can cost you (or save you) nearly $32,000.

Borrower satisfaction is the highest when going with a loan officer referred by family, friends and co-workers, according the Stratmor Group’s most recent national borrower satisfaction index.  Less satisfying were Realtor referrals and below that were builder referrals.

That makes perfect sense to me. Those close to you just want what is best for you. They can’t tell you fast enough about the mortgage folks that took good care of them.

Real estate agents are often most interested in the transaction just closing on time.  The builder wants you to stick with its lender as your mortgage is likely being marked up. That may be a big, fat additional profit center. It’s also easier for the builder to manage the buyers.

The foremost reason borrowers pick a loan officer is how well he or she interacted with the customers before they decided to work with them. In other words, connection!

What about mortgage brokers compared to lenders?

Mortgage brokers received the same high levels of customer satisfaction as retail originators like banks, credit unions and mortgage bankers, said Garth Graham, senior partner at Stratmor.

And, the top 40 percent of all mortgage originators write 80 percent of all home loans according to Graham. So, keep in mind that 60 percent of loan officers are slugs.

Last year, for the first time ever, more than half of all loans were originated either online or via call centers. But only 20 percent of purchase transactions were originated this way.

Whether you are purchasing or refinancing, talk with at least three mortgage originators. Ideally, they will be referrals from family, friends and co-workers. Do not dismiss out of hand any real estate agent referral. Talk with the builders’ lender at your own risk.

Ask the originators you are interviewing for contact information of the last three customers they funded. You don’t need to actually call them. Just notice the loan officers’ reaction to your inquiry. Is he or she proud as a peacock or hesitant to provide the information?

If you have questions or comments, please contact Jeff Lazerson by clicking here.