Here is a very detailed answer to a question posted on Trulia that my loan officer Jeff Tung, Jr., answered. The buyer was asking should he want to get pre-approved becaused that will establish a working relationship from that point and questioned fees. This may enlighten some of you about how & what goes on in the mind of a loan agent and how to pick the right loan agent to work for you. Jeff Tung, Jr’s responded:
I can attest to the fact that certain companies charge a “minimum” fee to originate your loan, as I’ve experienced the same explanation from other lenders during my search for an investment property. That is the policy for some companies and who am I to argue?
Well, in that case I was the consumer…ie: you. And the consumer has a right to understand what the fees are, where they are come from and why you are charged. With that said I do agree with most of the responses saying that “trust” is everything. Trust is everything! However we all still have a bottom line. As a professional in the industry I have first hand experience with borrowers working with multiple lenders at a time; It is there prerogative.
Some fees are up to negotiation. Some are fixed. It’s your loan officer’s job to teach you about these fees and bring you to an understanding of them; while helping you in making a comfortable decision. Understanding the fees are one thing, but making a comfortable decision is where the trust and transparency of your business relationship is key. Many if not all loan officers work for you for FREE until we close the transaction.
The bigger picture, “time is money.” Processors and underwriters spend hours examining documents and preparing loan packages. Some how they must get paid, and as mentioned before we don’t get paid until the transaction is complete.
My suggestion is, interview your Loan Officers and Real Estate Agents first. Talk to them about what you are wanting to do. Feel them out. In my mind the relationship between the agent and their principal goes way farther than just business.
Service: is your loan officer available to answer your questions, even when it comes down to price!? Are they able to communicate with you during non-business hours to explain something that may be of concern to you? Are they flexible in meeting and coordinating with you and other third parties? More importantly, would use their assistance again? Would you refer your friends and family to them?
All I’m saying is, business is not just business in the Real Estate game. There are far too many of us for that. It is a working relationship that can be life long. Ultimately, you are the one who makes the decision. Base what you pay on the service you are provided, and you will have piece of mind.