If you are thinking of buying a home in the state of Alabama, you might first wish to consider why certain builders or real estate agents might recommend a particular lender. Recommendations for lenders are made for several reasons.
For one thing, the builder and/or real estate agent will want to make sure that the lender you are using is completely stable and reliable. You also want to make sure your lender is reliable, otherwise you might end up in a nightmare situation. A reliable lender is of vital importance for everyone involved in the house purchasing situation. If the loan falls through, then the deal does not come to a close, and everyone walks away empty handed.
Another benefit to working with a lender that has been recommended by a builder or real estate agent you are already working with is the fact that oftentimes the recommender will have developed a certain amount of “clout” with the lender. This means that, when you are in a situation where you need to cut through bureaucracy in order to get something done quickly and efficiently, you are able to do so.
If you are buying a new home, it is often very wise to go with a lender that has been recommended by someone you trust. For one thing, numerous intricacies are involved in the purchase of a new home that are not present when you are purchasing resale. When looking for a lender on your own, you might manage to find one that quotes a great rate and knows a lot about refinances and resales – but does not have any experience when it comes to new homes. This inexperience can lead to major delays and problems. It is best to go with an experienced, recommended lender in these cases.
Throughout the past decade, a lot of big real estate agencies and builders have developed their own mortgage brokerage firms. This sort of “bundled service” makes a lot of sense in terms of profit for the given company. It is also helpful in that it assists real estate agencies in offsetting higher commission splits with agents.
If you dealt with this new form of “bundled services” in its earliest days, then you might have had a bad experience. Back then, the staff and loan officers were usually sub-par, and the overall service quality was embarrassingly low. Since then, thankfully, there has been a lot of improvement. At the same time, keep in mind that this is “captured business.” This means that the lenders in question might not have the highest incentive to offer you low rates or good deals. In order to get the best possible deal, you should let them know that you are “shopping rates” – this will generally motivate them to accommodate you to the best of their ability.
When a lender is recommended to you, do not automatically disqualify them. But you should ask questions about the relationship between that lender and the recommender.