GIMME SHELTER- Keep it local: How to choose an ethical lender
Q:I want to buy a house, but the mortgage industry seems to have become so treacherous. How do I find an ethical lender?
A: The answer to the question is simple: Find people you trust. Ask them.
Charlottesville, in spite of its growth, remains a small town. Word of mouth carries faster and farther than ever. The strength of a lender's reputation can help you determine whether you want to (or should) work with a particular person. When shopping for a lender, you have two main questions to answer: Is the person trustworthy? Is he or she looking out for your best interests?
Finding an ethical lender is more crucial than ever. As the market shift continues, every week brings new reports of lender layoffs and fraud. Finding a lender who will represent your best interests rather than his own has always been important, but even with the web, doing the necessary due diligence is seemingly more difficult than ever.
The foundation of real estate and lending is relationships and reputation. Choose someone committed to the community, someone invested in bettering the community, someone involved in local associations, organizations, charities; and someone whose business depends on your recommendation to your friends and colleagues.
There's nowhere online to "rate a lender" (as there is no "one" place to "rate a Realtor"), so don't waste time Googling. Talk to your friends who have purchased homes in the Central Virginia area. Find out who they liked and perhaps more importantly, who they disliked– bad news travels faster.
While the temptation exists to go online and find the cheapest, best rate, don't do it– online lenders are not accountable to the Charlottesville community. I can't tell you how many times local lenders have told me about online brokers' interest rate locks expiring before closing. (This means that guaranteed rate you were depending on likely won't be available come closing day, and that 6.25 percent interest rate may be 7 percent.) To use the cliché– if it seems too good to be true, it probably is.
Or as I put it to my clients, choose someone whose office you can walk into, look him in the eye, shake hands, and tell him to "fix it," even if fixing it means he pays for it. Those who are defending their reputations will more often than not do what's right to make the client satisfied.