Even though I had heard the same words from five different people that day it still struck a chord Maybe it was the frustration and desperation on the borrowers face. Caught up in the wave of dropping interest rates this borrower avoided locking in his rate hoping that the rates would continue to drop. They didn’t. In fact so much so that he grabbed back his paperwork and ran tome in search of a slightly lower rate. All he did by waiting was slow down his own loan the money he now needs in a matter of weeks not months not to mention frustrate his old broker who wasted his time for nothing.

I know rates have risen a bit and I realize that they may continue to rise but now is still the time to buy that new home or refinance the old one Rates are the lowest they have been in almost 30 years and even if they do continue to rise you can still get a great deal. But what if they fall? What if the borrower had locked in his loan and watched the rates fall even lower Yes that could happen and he would have missed an even better deal. But how much better would it be? A half a percentage point? By not locking it in he probably lost more than the one point he was trying to save. And on the other side of it he is submitted paperwork and begun a loan that is taking up space on an already harried loan processors desk. Hundreds of borrowers do the same thing every day creating an enormous bottleneck that holds up every ones loans. Its only human to want an even lower rate. But when will they decide its low enough?

Now is the time to get your loan but make sure you don’t end up in the position of the harried borrower. Shop around for the interest rate that fits your financial background as well as your budget. You can’t expect the lowest rate if you have missed your car and Visa payments for five months. When you find a rate you can afford and an institution currently quoting that rate fill out the loan application and lock in that rate as soon as possible. Remember that this isn’t the stock market. Get a good rate stick to it and get that money.

I have good news and bad news. Now is a great time to refinance the bad news is that the good news already leaked out. Everyone you talk to is refinancing and getting your broker on the phone is a little like placing a person to person call to the Pope. Yes we are extremely busy in the brokerage business and believe me it gets more than frustrating when we can’t give people as much time as we’d like. But if you still want to take advantage of the current low interest rates here are a few things you can do.

Seven ways to speed up your loan.

  • When you go to your broker of banker to fill out an application have everything you’ll need with you. You’ll be asked to provide your social security number complete names address: 3 and numbers of employers all your credit card mortgage savings and checking account numbers and your complete tax returns for the past three years try to err on the side of having too much rather than too little information with you.
  • If you need to take your application home bring it back in person rather than wasting time mailing it in this also goes for any other documents you are asked to provide to the lender.
  • Run your own credit check before you apply for the loan. If you get a copy of your report now you ll have time to clear up any discrepancies before the loan company sees it. Many people who think they have a clean record find mistakes that could spell the difference between getting and losing a loan If you do have a less than perfect record take the time to explain late payments or bank ruptcies in writing and the steps you have taken to remedy the situation.
  • Know how much of a monthly payment you can reasonably afford to make Most loan brokers or bankers will pre-qualify you for a loan To speed things up go to a broker before you begin house hunting or looking for a loan and find out the largest loan amount your earnings will support. When you do find a house or look for a Joan stay in your price range and you won’t have to worry about being turned down because you don’t qualify.
  • When your loan application is in try not to pester your broker or processor with a lot of phone calls. Try to lump all of your questions into a call once a week update call. They are very busy and may not get back to you as quickly when you really need an answer to an urgent question.
  • If you make an appointment with an appraiser pest inspector or even your agent or broker is there! These people especially appraisers are extremely overbooked and might not be able to reschedule for weeks pushing your loan back even more
  • Finally the most important advice I have is to remember the Golden Rule. Your broker or processor is not a workhouse. He or she is a seasoned professional with an extraordinarily stressful job. Besides making their job a little easier with the above steps if you treat them with the respect and patience you expect to be al forded I guarantee they will return the favor.

Banker? Broker? What’s the Difference?

Johns banker promised him a rock bottom interest rate then put off locking it in His low rate went through the roof. Even though he had gotten advice from his friends he heard so many conflicting stories that he decided to play it safe with his own bank and still ended up unhappy. His bank had always come through on his checking account what went wrong?

When borrowers don’t take the time to analyze their needs and match them to the right service person mistakes are inevitable. One of the first choices you should make is deciding whether to see a banker or a broker about your loan. Most borrowers have this vision of themselves walking into a big marble bank being whisked off to a red leather chair and cup of espresso in hand seeing a loan officer who after two or three questions hands them their check. Now for reality Truth is banks don’t make loans as readily as they used to Since the S&L scandals the government has imposed tight regulations. What that comes down to is that many loans that would have funded just a year ago will now be rejected.

Nowadays banks tend to look for loans that will fund easily due to the borrowers perfect credit or collateral. They want a virtually guaranteed loan. Even when they do agree to fund a loan you won’t necessarily get the quick personalized service you desire. Banks are in the business of making money. They are designed to deal in several kinds of transactions one of which is making loans. On the other hand brokers are involved in one type of business servicing loans. If you’re not happy and decided to do business elsewhere that broker won’t get paid. [f you’re not happy with a bank and walk out the banker won those a cent; he has much less motivation to make sure you’re satisfied. A broker’s job is to walk you through the process of getting a loan It can be a confusing time consuming process at limes but your broker should be an expert at getting you funded quickly and easily. Of course there are good and bad brokers so do your homework Ask what kinds of systems are set up to help you get a loan For instance Allstate Funding has a patented computer system designed to generate all OF Fine paperwork as well as tracking a loan 24 hours a day providing updated loan information to all 71 offices. Very few banks can afford that kind of personalized service. A good broker will also be apprised of every type of loan program available and know how to match the borrowers to the loan that’s right for them unlike banks who might be tempted to push the special of the day. But there is a catch. To cover this specialized service brokers charge points on the loan (one point equals one percent of the loan amount).

Remember what you’re really paying for is expertise access to competitive rates through several loan companies and personal service. To many people these benefits outweigh the extra charge. The choice is yours. But whether you decide on a broker or a banker do your homework and make the best choice for you.

Baljit Singh Manager/Loans Allstate Funding Inc. 1-800-585-6263

Article extracted from this publication >> June 5, 1992