A couple of weeks ago, I talked about the fact that a lot of real estate deals are falling apart over inspection items. That seems bad, but dulls in comparison to the amount of deals that are getting held up or falling apart because of lending issues. This was and still is the number one reason why people are not or cannot buy homes. Many have tried and failed because of lending issues in the last two years.
The lending landscape is tighter than ever even though banks are showing record profits once again. I can understand why lending institutions are being cautious not wanting to fall into the same trap again, but someone has to tell them that they have swung the pendulum too far in the other direction. It’s time to come back to center.
That’s why I am writing this week’s column on how important it is to have the right lender. This guy or gal can and will make all the difference in a successful transaction that closes smoothly. Here are a few tips:
1) Find someone local. I can’t tell you how many times buyers have gotten in trouble by using an out-of-state lender. It’s imperative that the lender knows Colorado, its real estate laws, policies, and procedures. Local lenders know neighborhoods, values, service providers and yes, realtors. If you still are not sure why this is number one, call me and I’ll explain further.
2) Interview your lender and make sure that they know their stuff. A lender that is up–to-date on all the latest changes, guidelines, laws, and rules will save everyone money, time, and aggravation.
3) Get references and more. Chances are, you stumbled upon your lender from a referral which is generally a good way to go, but then you need to check them out. Ask for references, check with the Better Business Bureau, check with the state real estate commission, and heck, even do a background check on them.
4) This business is all about the “Three D’s:” dates, deadlines, and documentation. If your lender is on the ball, keeps you ahead of the dates and deadlines, and helps you with the documentation, then you’ve won more than half the battle.
Finally, trust your instincts when selecting a lender; make sure you feel like you have good rapport with them and follow their advice. Remember that this should not be an adversarial relationship. The lender should really be trying to help you.
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