Mortgages: Fad of the Moment or Long Term Relationship?

Allison Gervais

Every once in a while my phone rings with a person asking abruptly, “What is your rate?”(without even asking for my name!) 

by Allison Gervais
San Francisco Mortgage Loan Consultant

It is the ultimate sign they’ve called all over town hoping to get a home financing deal “too good to be true”. (For example a “no cost” mortgage doesn’t really exist.  The interest rate on this loan is higher to absorb the costs, often being more expensive in the long run.)

Fad of the Moment Doesn’t Last!

I call these types of clients the “fad of the moment” client.  They don’t realize the lowest rate they find one day may not exist the following day or may include features on the loan such as a hefty prepayment penalty. 

They are continuously searching for the lowest interest rate, often not obtaining the best loan for their financial situation because of their obsession with obtaining the lowest rate.  The “fad client” also misses the opportunity to build a solid relationship with an experienced loan officer. 

A solid relationship with your loan officer puts money in your pocket!

Among other benefits, a loan officer can offer mortgage-planning advice before, during and after the transaction.  A loan officer will also diligently search out the best interest rate.

It’s also not uncommon for the “fad client” to feel experienced loan officers (a.k.a. “agent”, “consultant”, “planner”) are taking money out of the client’s pocket.   A loan officer who really knows his or her business will actually do just the opposite…put money back into the client’s pocket!  How?  

Loan Officers Can Help

A loan officer is not tied to any one mortgage instrument.  For example in my business, I have access to over 250 different types of mortgages.  By asking lots of questions to fully understand a client’s financial situation, I am then able to  recommend the mortgage that best serves my  client.   If your loan officer isn’t asking a lot of questions and offering to fully educate you about how the loan works, you aren’t getting your money’s worth!

Taking the Longer View

“Long term relationship” clients on the other hand, are willing to take a “longer” term view.  Although surprised, they trust me when I advise them to wait before purchasing a home or not to refinance because financially, it didn’t make sense.  I also take the time to help them clean up errors on their credit reports or show them ways to save for future real estate investments.  In fact, I can show clients who want to build a real estate portfolio but can’t afford CA prices how to invest in properties located in other parts of the country!

Remember, as the saying goes, “there’s no such thing as a free lunch.”  That couldn’t be truer in the mortgage business.  With the record number of recent foreclosures, it’s hard to have a feeling of trust within the mortgage industry. 

This is why it is more important than ever to find a professional who educates and advises, not just quotes the lowest rates that seem to, like the fad of the moment, disappear the following day!

by Allison Gervais
San Francisco Mortgage Loan Consultant

Tags: Money, Real Estate

Category: Real Estate