For many prospective homebuyers, the first professional they come in contact with is their real estate agent, or realtor (member of the National Association of Realtors). This is the individual who will guide them through the process of selecting, negotiating, and closing a deal on a home, fulfilling for many a long-held goal of homeownership. However, once the home is selected and a deal is struck between buyer and seller, the real estate agent typically hands off the client to a mortgage loan officer to arrange mortgage financing. But how is the loan officer (and the mortgage banker or institution behind them) chosen? Freddie Mac, one of the nation’s primary mortgage players, last week released the results of a comprehensive survey of real estate professionals, including an interesting look at how homebuyers wind up with their loan officer. First, note that the vast majority (73%) of real estate pros work with just a small handful of lenders (just 1-3). Next, the survey reveals that 76% of realtors report that their clients always or often use one of their preferred or recommended lenders. For those who sell at least 20 properties a year, that increases to 87%. In short, most homebuyers end up using the mortgage provider recommended to them by their realtor.
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Many of you are probably wondering if using your realtor's lender is even a good idea in the first place. For more guidance, check out 'Do You Have to Use Your Agent’s Preferred Lender?'. It is critical to remember that the decision of which lender you use is completely yours, and yours alone. Make sure you take responsibility and do your due diligence. Shop around, ask questions, and make sure you are comfortable with the lender you choose. Remember – this is one of the largest financial commitments you will ever make!
In terms of the recent Freddie Mac survey, another key piece of advice to keep in mind is that only half of the real estate agents surveyed felt confident in educating their clients about mortgage lending. On top of that, only 30% felt competent to give counsel when it comes to down payment assistance options. So again, it pays to ask questions and to ask for second opinions from more than one source. It won't hurt to ask your agent, but get advice and counsel from a mortgage professional or another trusted financial advisor.
For more on this topic, check out 'Realtors Decide Who Gets The Loan in Most Cases'.
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