Experience, referrals key to choosing mortgage broker
Vail, CO, Colorado
EAGLE COUNTY ” Puppies. Rainbows. Springtime flowers. Mortgage brokers?
Well, according to the experts, when you take the plunge into buying property, you should have the same warm, fuzzy feeling about your mortgage broker as you do about your favorite sweater. In an industry where terms like “acquisition indebtedness” and “wraparound mortgage” are thrown around daily, it’s important to feel comfortable with the person helping you decide where massive quantities of your hard-earned money will go, they said.
“You should be able to get the feel that your mortgage broker is being pretty honest just by your gut feeling in talking with him or her, and so just try and get to a good level of trust,” said Arch Wright of Wright Mortgage Co. in Edwards
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Of course, it’s not quite as simple as that.
“I would choose a reputable one,” said Jack Skjonsby, of Countrywide Financial, a national home loan lender with three branches in Eagle County. “Get into the questions like, ‘Who do they deal with’ and ‘What sort of history do they have?’ Do some homework on the broker or the lender.”
Wright adamantly said buyers should choose a mortgage broker “by referral only.”
“Borrowers should talk with mortgage brokers who come highly recommended with regards to their reputation and years of experience,” he said.
Because it’s relatively easy to get registered as a mortgage broker in Colorado, those years of experience are crucial. Jimmy Brenner, president of Blue Sky Mortgage in Avon, said about 66 percent of the loan officers in the country have fewer than five years experience in the field.
“They have no experience with the good and bad things that can happen with adjustable rates, the economy and future qualifications of borrowers,” Brenner said.
When shopping in this neck of the woods, mountain resort-specific experience is a must, Wright said. A big-city broker may not understand the intricacies of doing a loan of a Beaver Creek home, however successful his business is.
Find a broker with many programs and sources to shop from, Wright, Skjonsby and other experts suggested. Wright Mortgage has more than 200 lenders to shop from.
“This usually results in a very competitive interest rate and program for the borrower in the end,” Wright said.
Just like anything else in life, beware those slick presentations and rate quotes that look too good to be true, Brenner said.
Wright advised ignoring the advertising or other marketing gimmicks altogether. He said what’s left in the fine print or unmentioned may have dangerous consequences.
“There are a lot of sales gimmicks in the industry and some of them are even hard for industry people themselves to fully understand,” Wright said. “A well-regarded, local mortgage broker is less likely to sell a borrower on some type of gimmick if there is some chance that the borrower might later tell his local friends or Realtor that he got shammed by a local mortgage broker – too small of a valley to where this won’t eventually get around.”
Brokers or bankers?
Many in the market for a new home will spend at least a little time debating whether to go through a mortgage broker or a banker for the cash to fund the purchase. Many say the person you pick is far more important than which industry you go with.
“In my opinion, it is not a question of whether it is better to work with a banker or broker because ultimately, the interest rate and loan programs are very similar between the two,” said Dave Roberts, the senior vice president of Alpine Bank’s Mortgage Division, which has many branches in the area.
Roberts advised checking out the individual broker’s or loan officer’s history in the industry and choosing one from reputable company.
Still others point to the benefits of the services they offer.
“A broker has the ability to use many different lenders and programs whereas a banker is usually limited to that one bank’s programs,” said Jimmy Brenner, president of Avon-based Blue Sky Mortgage.
Bankers have criticized mortgage brokers for operating with fewer regulations than banks, and while this is true, new regulations implemented this year requires mortgage brokers to be registered with the state.
“I can hear a bunch of bankers saying, ‘They’re a bunch of gun slingers,’ but the industry is starting to tighten up a bit,” said Jack Skjonsby, of Countrywide Financial, a national home loan lender operation with three Eagle County branches.
Still, Roberts said the penalties and fines a bank will incur for not complying with lending regulations are much stiffer than the punishment for mortgage brokers, which compels banks to give customers all the information about the deal they’re signing.
Skjonsby suggested choosing a firm like Countrywide Financial, which offers the best of both worlds by employing mortgage brokers or loan officers but being as large as a bank to offer the greatest amount of personal attention and protection.
“You could say I’m a broker, but I function like a bank,” Skjonsby said. “I can be in the middle of both of those. Mortgages are our business.”
Realtors were shy about saying if they’d recommend banks or mortgage brokers for the job.
“If you recommend one, people tend to think you’re hooked up with somebody,” said Ron Herbinger with Vail Realty.
At the end of the day, the choice is yours.
“A mortgage is often the single largest and most important financial consideration a borrower may go through in their lifetime,” Brenner said. “They should choose their lender and consider their advice very carefully.”
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