How to Find a Lender, and What Questions Should I Ask Them?

June 6, 2022

Listen to the First Time Home Buyers Podcast on your favorite app

Today we’ll be talking about how to find a good lender and what questions to ask them to make sure they’re a good fit for you.

We’ll go into more detail on each one so that you can have the best understanding of the options available to you.

Let’s first start by just listing a few of the ways to find a lender:

Realtor referral
A friend or coworker who recently bought a home
An Online Search
A referral from an organization

Some questions to ask a potential loan officer:

How long have you been working in the industry?
What types of loans do you primarily work on?
What types of loans do you like working on?
What do you like about doing loans?
What is your communication style and method, how often will we be talking?
I’m really new to this process, do you work with a lot of first time home buyers?
Do you have any first time home buyer programs? Any down payment assistance programs?
How long are your loans taking to close?
What’s the market looking like right now? What should I know?
What do you need from me to get started?

How to Find a Lender:

Realtor Referral

If you’re already working with a real estate agent and you’re happy with the relationship, it’s a great idea to ask them for a lender. It’s always good to ask for multiple referrals, since your agent will likely have a few to offer.

The relationship with the loan officer can really set the tone for the entire transaction. Some lenders will work better with other clients, and vice versa. For example, some clients tend to work better with a more numbers-focused lender, whereas other clients may prefer a more relationship-based approach. So make sure you let your agent know what you’d prefer; they’ll typically already have an idea of who might work best for you.

There are also lenders that have more experience with different loan types. Some may know the ins and outs of VA loans or down payment assistance, while the more seasoned lenders are masters of them all. It’s definitely worth having that discussion with your realtor. They’ll be able to help you narrow down the selection to the lenders that they’ve worked with before, so you can go into the process with confidence.

Something else to know it’s against federal law for a loan officer to pay a realtor or another referral partner for your lead. So rest assured that if they refer you to a loan officer, they’re doing it because they think that you’ll be the best fit to help you with your loan.

Friend or Coworker Referral

If you’re just starting out and you don’t have a realtor that you’re working with, reach out to a friend or coworker who recently purchased a home.

(You can also reach out to our team via our website, and we’ll be able to set you up with a realtor that we’ve worked with as well!)

Ask your friend how the experience was: would they use them again for their next home purchase? If they’re willing to talk about it, you can ask what type of loan they had and if they were offered options to choose from. Since this type of referral is normally a casual, face-to-face conversation, you can usually trust this referral.

A definite advantage to asking a coworker is that oftentimes, the financial situation will be similar for you and your coworkers; so if there is a unique pay schedule, or HR is more difficult to verify employment with, the loan officer and their team being referred to you has already worked through that before with your coworker. This will help your loan process go that much smoother.

Asking a friend is a great way to get a referral. Rest assured, your information is kept private and confidential. You’re not going to get your friends’ information, and they’re not going to get yours. But it’s always good to have that discussion because a friend’s referral is pretty strong.

Online Search

Another option to find a lender is simply through an online search. As easy as this sounds, it can be tough to distinguish between regular results and paid results. One thing we always recommend is to make sure you skip the ads at the top (there’s usually about three of them). And there isn’t really a single source for loan officers; you can look at Google and Yelp, and maybe try Facebook for a more personal approach. But remember: the reviews themselves may not be completely accurate.

So, let’s talk about each one of those. With Google, you can search something like, “loan officer near me,” or “mortgage broker near me.” That’s a good start. These phrases are going to give you local results, i.e. people in the same city as you. Sticking to local results may not be truly necessary; oftentimes, your loan officer can be in a completely different state or area than you. An in-person meeting isn’t even required. Also, you can decide if you want to work with a bank or not. If you do want to work with a bank, we suggest one with whom you already have a working relationship. Look at the reviews, read the descriptions, even pick up the phone and call.

It’s up to Google to order the results, so take these results with a grain of salt. In a smaller town, it’s probably fine, but for a larger area, you really just get the people who are closest to you, not necessarily the people who are the best fit for you. For example, your ideal lender may be number 12 on the list of results.

Yelp is pretty much the same, but it does rely more heavily on reviews. Yelp tends to skew their results more, and their algorithm is much less understood than Google’s.

Facebook can actually be a great area. If you belong to any groups, especially home buying groups or local parenting groups, you can get some great recommendations. Just make sure you look up the lender to ensure that their contact info matches to ensure that you’re speaking to the actual person.

(We can also help you find a good lender. Let us know what state you’re in and what your needs are, and we’d be happy to help you find the right person to help get you started.)

What Questions to Ask a Lender?

Now, let’s get into some of the questions you can ask the lender when you interview them to see if they’re the right lender for you. After each question that is listed below, we give a brief explanation of the importance of said question during your leander search.

How long have you been working in the industry?

This is a great question. A brand new lender, or someone with less than a few years experience, isn’t the end of the world; however, if you have complicated finances, this may be the opportunity to work with someone with more experience.

What type of loans do you primarily work on?

It’s good to understand which loans a potential lender is familiar with. If you’re seeking out an FHA loan and all a particular lender does is conventional and jumbo, it may not be the right fit for this purchase.

Follow-up: what types of loans do you like working on?

This is helpful to understand the type of work they like doing, especially if it aligns with your situation. It’s common to see a loan officer who typically likes working with and digging into down payment assistance, for instance. It’s always great to work with someone who’s really passionate about the type of program you’re going to be working with.

What do you like about doing loans?

In the end, we all work for money, but it’s a good question to get a better understanding of their goals with being in the industry.

What is your communication style, and how often will we be talking?

This is very important. Make sure that this aligns with your preferences. Do they prefer email, text, or phone? You need to be on the same page as your lender to ensure right away to set the tone concerning communication. This is important because if you are working, especially with a bank, their hours are Monday through Friday 9am-5pm; you will not get them on nights. You will not get them on weekends. And if you have additional questions during that timeframe, you want to make sure that you’re able to get in contact with your lender.

(For the first time home buyer) Do you work with a lot of first time home buyers?

If you don’t feel like they’re there to help and educate you in the process, it’s probably a good idea to move on. We want to make sure that all of our clients are educated on what’s going to happen each and every step of the way. And there’s a lot of lenders out there that just don’t do that.

Follow-up: Do you have any first time home buyer or down payment assistance programs?

This can help you decide if they’re at the right company to help you out. You might find a great loan officer that you really like, but they just don’t have the company to back them up or the programs to back them up as well.

How long are your loans taking to close?

Typical loans take about 30 days faster. Companies can do loans in 17 to 21 days, so ask them to be honest and tell them you just need to know so that you can ensure your realtor has timelines in place.

Companies go through growth transitions, where they may take a little longer to process, and these things can happen. But make sure that you pull an honest answer out of them because if their average closing time is 40 days and the market calls for 30 days or less, this may not be the lender for you.

I think this is a great opportunity to have a discussion with your realtor. After you talk to the lender and ask them if that would pose any kind of issues with getting your offer accepted.

What’s the market looking like right now? What should I know?

By asking this question, you’re testing their knowledge. You’ve already told them that you’re a first time home buyer. So listen carefully and ensure that they’re explaining things in a succinct way. They should be able to tell you about loans that they’ve recently done and how those have gone to give you real world examples of the market.

What do you need from me to get started?

You can decide whether or not you want to ask this. If you’re really not feeling it, don’t even bother asking this; but if you are, this is a great way to understand what they’re going to need from you. Also, only ask this question if you’re ready to get started.

They’re going to need several things from you: your social security number, date of birth, driver’s license, income, and approximate purchase price of the home you’re looking at. Additionally, they should also be asking you for supporting documentation, such as your W-2s, bank statements, tax returns, and paycheck stubs.

The more they ask, the more thorough they’re going to be. And that’s a good thing. You want them to see your info to ensure that the type of work and pay won’t cause any issues in getting the loan completed in a timely manner.

The key point here is that you have to get to know your loan officer. You’ll be working very closely with them for 30+ days while you’re in escrow, and you’ll be discussing very personal financial matters. If you aren’t comfortable talking to them on the phone, then consider calling someone else.

It’s important to feel comfortable with your lender, and it’s important to trust them. The relationship between you and your lender is an intimate one; it’s hard to genuinely trust someone who is just selling their services.

Once you’re comfortable, you’ll talk to your lender and either do an application over the phone or online. From there, they’ll review the information and if you qualify, they’ll issue you a preapproval letter with the loan amount that, considering the documentation you’ve provided and your credit score, they feel comfortable with.

Philip Mastroianni – Loan Officer & Real Estate Agent
(888) 364-1555
Phil@HomeLoansPM.com
NMLS#2141541
DRE# 02141890
Pacific Patriot Financial

Sarah Krasner
(702) 466-6430
NMLS #1272407
Divisional President, Diamond Residential Mortgage Corporation

Transcript:

Phil: 0:00

Welcome to the loan pros podcast, where we help make you a more informed home buyer, we’re Phil and Sarah, and with our combined over 40 years of real estate and lending experience, we’re here to help you navigate the home buying process with an emphasis on the lending side. Today, we’ll be talking about how to find a good lender and what questions to ask them to make sure they’re a good fit for you.

Sarah: 0:31

let’s start first by just listing a few of the ways, , realtor referral, a friend or coworker who recently purchased a home, an online search. A referral from an organization. So let’s start off with the realtor referral. If you’re already working with a real estate agent and you’re happy with the relationship, it’s a great idea to ask them for a lender.

Phil: 0:55

Yeah, it’s always good to ask for a couple of them. , they may have three or four, I think it’s always good to ask for multiple referrals, but as a licensed real estate agent, I can tell you that the relationship with the loan officer can really set the tone for the entire transaction. I also know that some lenders will work better with other clients. My engineering and medical clients tend to like to work more with kind of numbers based lenders. While some of my clients may prefer a more relationship based approach. So make sure you let your. Agent know, they’ll typically, already have an idea of who might work best for you. There are also lenders that have more experience with different loan types. Some may know the ins and outs of VA loans or down payment assistance while some are more seasoned lenders and basically masters of them all.

Sarah: 1:42

It’s definitely worth having that discussion with your realtor. They’ll be able to help you narrow down the selection to the lenders that they’ve worked with before. So you can go into the process with confidence, something else to know it’s against federal law for a loan officer to pay a realtor or another referral partner for your lead. So rest assured that if they refer you to a loan officer, they’re doing it because they think that you’ll be the best fit to help you with your loan. If you’re just starting out and you don’t have a realtor that you’re working with, reach out to a friend or coworker who recently purchased a home, or you can reach out to one of us, myself, or Phil, and we’ll be able to set you up with a realtor that we work well with as well.

Phil: 2:27

Ask your friend how the experience was, would they use them again for their next home purchase? If they’re willing to talk about it, you can ask what type of loan they had and if they offered options to choose from, since this is an in-person referral, you can usually trust this referral. The most, oftentimes the financial situations will be similar for you and your coworkers. So if there is a unique pay schedule or HR is more difficult to verify employment, the loan officer and their team will have already worked through that before with your friend or coworker, which will help your loan go that much smoother. So asking a friend is a great way to get a referral. Rest assured your information is kept private and confidential. So you’re not going to get your friends’ information. They’re not going to get yours, but it’s always good to have that discussion because a friend’s referral is pretty strong

Sarah: 3:16

another option to find a lender is simply through an online search and as easy as this sounds, it’s tough to distinguish between regular results and paid results. And there really isn’t a single source for loan officers. You can look at Google and Yelp, Facebook and other areas. But remember that the reviews themselves may not be completely accurate. So let’s talk about each one of those

Phil: 3:41

With Google, you can do a search for a loan officer near me. That’s a good start or search for a mortgage broker near me. Now this is going to, give you very local results. So people in the same city as you, that may not be truly necessary. Oftentimes your loan officer can be in a completely different state or area than you in person meeting isn’t even required. One thing I’m going to always say is make sure you skip the ads at the top. There’s usually about three of them. Also, you can decide if you want to work with a bank or not. If you do want to work with a bank, I suggest one, you already have a working relationship with, look at the reviews, read the descriptions. I’ll always suggest to pick up the phone and call. As much as this sounds like a great way to find a loan officer in my town, for example, one of the best lenders that I worked with as a realtor is number 12 on the list. It’s up to Google to order the results of take these results with a grain of salt in a smaller town, it’s probably fine, but a larger area. You really just get the closest people to you. Not necessarily the best fit for.

Sarah: 4:47

Yelp is pretty much the same, but it does rely more heavily on reviews. Yelp does tend to skew their results more and their algorithms is much less understood than Google’s. Facebook can actually be a great area. If you belong to any groups, especially home buying groups or local parenting groups, you can get some great recommendations, just make sure you look up the lender to ensure that their contact info matches to ensure that you’re speaking to the actual person. We can also help you find a good lender, let us know what state you’re in and what your needs are, and we’d be happy to help you find the right person to help get you started.

Phil: 5:27

let’s get into some of the questions you can ask the lender to help interview them, to see if they’re the right person for you. So I’m going to go ahead and say the question, and then Sarah’s going to give you an idea of why that question’s important. Here’s the first one. How long have you been working in the industry?

Sarah: 5:43

This is a great question because though a brand new lender or someone with less than a few years experience, isn’t the end of the world. If you have complicated finances, this may be the opportunity to work with someone with more experience.

Phil: 5:57

A second one here is what type of loans do you primarily work?

Sarah: 6:01

It’s good to understand loans that they’re very familiar with. If you’re seeking out an FHA loan and all they do is conventional and jumbo, it may not be a right fit.

Phil: 6:13

That’s a great point. And then following up with that, what types of loans do you like working on.

Sarah: 6:19

This is helpful to understand the type of work they like doing, especially if it aligns with your situation.

Phil: 6:25

there’s a lot of times where a loan officer typically likes working with, you know, down payment assistance and they that’s really where they like digging into. It’s always great to work with someone who’s really passionate about the type of program you’re going to be working with. This fourth one here is what do you like about doing loans?

Sarah: 6:43

In the end, we all work for money, but it’s a good question to get a better understanding of their goals with being in the industry.

Phil: 6:52

The fifth question here is, what Is your communication style, and how often will we be talking?Sarah: 6:59

This is very important. Make sure that this aligns with you. Do they prefer email, text, or phone? You need to be on the same page as your lender to ensure right away that you’re going to set the tone on how you will be communicating. This is important because if you are working, especially with a bank, their hours are Monday through Friday nine to five. You will not get them on nights. You will not get them on weekends. And if you have additional questions during that timeframe, you want to make sure that you’re able to get in contact with your lender.

Phil: 7:29

The sixth question here, and this is really for your first time home buyer, which I think most of you guys are going to be, but it’s, I’m really new to this process. Do you work with a lot of first time home buyers?

Sarah: 7:40

If you don’t feel like they’re there to help and educate you in the process, it’s probably good to move on. We want to make sure that all of our clients are educated and know what’s going to happen each and every step of the way. And there’s a lot of lenders out there that just don’t do that.

Phil: 8:03

For the seventh question is actually kind of a follow-up from the previous one. Do you have any first time home buyer programs, any down payment assistance programs?

Sarah: 8:12

Phil: 8:27

The eighth one here, and this is really, I think an important one and Sarah will touch on why, but how long are your loans taking to close?

Sarah: 8:35

Typical loans take about 30 days faster. Companies can do loans in 17 to 21 days, ask them to be honest and tell them you just need to know. So you can ensure your realtor has timelines in place. Companies go through growth transitions, where they may take a little longer while they higher up, and these things can happen, but make sure that you pull an honest answer out of them because if their average closing time is 40 days, but the market calls for 30 days or less, this may not be the lender for you.

Phil: 9:11

I think this is a great opportunity to have a discussion with your realtor. After you talk to the lender and ask them if that would pose any kind of issues with getting your offer accepted. The ninth question here is what’s the market looking like right now? What should I know?

Sarah: 9:27

Phil: 9:46

this last question, you can decide whether or not you want to ask this. If you’re really not feeling it, don’t even bother asking this, but if you are, this is a great way to understand what they’re going to need from you. And it’s just, what do you need from me to get started?

Sarah: 10:02

So only ask this question. If you’re ready to get started, they’re going to need several things from you. Your social security number, date of birth, , driver’s license income and approximate purchase price that you’re looking at. Additionally, they should also be asking you for supporting documentation, like your W2’s, your bank statements, tax returns and paycheck stubs. The more they ask, the more thorough they’re going to be. And that’s a good thing. You want them to see your info to, to ensure the type of work and pay won’t cause any issues in getting the loan completed in a timely manner.

Phil: 10:40

I think the key point here is get to know your loan officer. You’ll be working very closely with them for 30 plus days while you’re in escrow and you’ll be discussing very personal financial matters. If you aren’t comfortable talking to them on the phone, then consider calling someone else. It’s important to feel comfortable and trusting of your lender. But not someone who is just selling their services.

Sarah: 11:02

Once you’re comfortable, you’ll talk to your lender and either do an application over the phone or online. From there, they’ll review the information and if you qualify, they’ll issue you a preapproval letter with a loan amount that they feel comfortable with based on the documentation that you’ve provided and your credit score.

Phil: 11:21

We’re going to go into more detail on the pre-approval process in the next episode, but I want to thank you for listening and visit us on fthbpros.com, anytime or on your favorite podcast app