When a prospective buyer begins looking at home financing, the first step is often choosing a familiar bank or asking friends and coworkers for suggestions. Some turn to a lender they’ve used before, while first-time buyers may have no prior experience at all.
Understanding the Mortgage Decision
Mortgage shopping can feel overwhelming because the choices go beyond simply picking a loan type. Borrowers must weigh term length, interest rate, closing costs and discount points, each of which can shift the total cost of the loan dramatically.
A longer term, such as a 30-year mortgage, lowers monthly payments but adds more interest over the life of the loan. A shorter term, like a 15-year mortgage, raises the monthly amount but reduces the overall interest paid. Deciding between a 20-year or a 30-year term, or whether to pay points up front, adds layers of calculation that can discourage many home seekers.
Mortgage companies spend a lot of money on advertising across TV, online and print, promoting the lender’s brand rather than the individual handling the file. The public hears the name of the bank, not the name of the loan officer who will guide the borrower through the process.
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When a borrower applies with a large national lender, the application is often routed to a centralized processing center located in a different time zone. That distance can make communication slower and reduce the personal touch that many homebuyers value.
Why the Loan Officer Matters More Than the Lender
Choosing a loan officer with a solid track record can mitigate many of the frustrations that come with remote processing. An experienced professional knows the nuances of different loan programs and can explain how a discount point or a slightly higher rate will affect the borrower’s long-term financial picture.
Real estate agents frequently maintain lists of trusted officers they have worked with. When an agent refers a borrower, it usually reflects confidence that the professional will not only secure a competitive loan program but also “hand-walk” the application from start to finish.
Because the loan officer owes a fiduciary responsibility to the borrower, they are incentivized to find the most suitable product for the client’s situation, rather than simply pushing the lender’s preferred offerings.
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David Reed, a senior loan officer with more than two decades of experience, has closed over two thousand mortgages in both commercial and residential sectors. He authored several guides on mortgage fundamentals and has spoken on national television networks.
His commentary has appeared in major newspapers and magazines, and he has been featured on programs ranging from business news channels to morning shows. His background illustrates how a single officer can become a trusted resource for countless homebuyers.
Prospective borrowers should aim to collect contact information for at least two or three officers.
