Line Up a Lender

Mortgage seems like a scary word, and for good reason: It comes from mort (meaning “dead”) and gage (meaning “pledge”). Etymology aside, it really can feel as if you’re signing your life away when it comes down to the mounds of paper-work and years of paying back all of that borrowed money. Justin McHood of mortgagecommentator.com says that whether you choose a local lender or go with an online source really comes down to personal preference (check out his helpful tips at below). And he suggests five must-ask questions—besides the standard rates and fees—of any potential loan officer before making a commitment.

1. When do you answer your phone?
As crazy as this sounds, not all loan officers answer their phone. It really isn’t important what the loan officer says, as long as it matches what you want from that person. If they tell you that they are available on a 24/7 basis, but then don’t answer your call on Saturday at 9 a.m., that is a problem. But if they tell you that they only answer during “normal business hours,” then you know what to expect.

2. How long does it take to prequalify and get a loan status report?
Again, this is more about expectations. If the loan officer tells you “next day,” you know what to expect. If they tell you “20 minutes,” then you also know what to expect.

3. How many loans do you fund each month?
Loan volume is a signal of how well the loan officer does with clients and/or what their work volume is. A loan officer who funds 30 loans a month has an entirely different work life than one who funds two loans a month. It’s something to take into consideration, especially if you’re on a tight deadline.

4. How long have you been working in the business?
If a loan officer has been in the business more than five years, chances are that they have seen more than enough to help you navigate any pitfalls that you may encounter.

5. How long are you going to be working in the business?
Leave the most surprising question for last. Most loan officers will be surprised to hear you ask this; be sure to get your best poker face out and read their eyes. Oftentimes it makes the most sense to find a loan officer who at least likes what they are doing enough to plan to be doing it for the foreseeable future.

And don’t be shy: Check out any lenders with the Better Business Bureau.

Online Exclusive: Local Lender vs. National Lender

Again, this is personal preference. If you prefer to "see the whites of their eyes," then you will want to be sure to narrow your search to your local area. I have found that there is little correlation to the best rates and fees with geographical location. Your local lender down the street has as much chance of having the lowest interest rates and fee structures as the national lenders. So it will all come down to personal preference.

To start, ask your realtor for three loan officers as referrals. If you do this, then you will get a good sample of the local loan officers who work closely with the Realtor and chances are you will find at least one of those to be "good". After asking your Realtor, check out Zillow's Mortgage Marketplace. It is the most transparent, most helpful system around for finding a loan officer online who can help you. If you do those two things, I am 99.9% confident that you will find a good loan officer.