Selecting a good Loan Officer – Is it a science or just dumb luck?

So you have decided to purchase a home and now it’s time to find a loan officer to help you secure financing for that home.  Given this is probably your largest financial investment to date, the selection process seems somewhat important.  So where do you look?  It may seem less overwhelming if you eliminate some options first and then see what you have left.  Let’s start by crossing off Craigslist and the annoying telemarketing guy that has now started to call your cell phone.  You remember your 2nd cousin’s wife’s little sister was in the business “back in the day” but you also seem to remember that she had some financial trouble as well.  Let’s go ahead and cross her off too.

So who does that leave?  You googled lenders in your area and see two potential options, your realtor gave you a couple names, and your dad gave you the name of his banker.  So how do you know who will be the best choice?  Is there a publicized ranking system?  Can you ask Jeeves?  Is anything “measurable” or do you just have to rely on Facebook to give you the answer?

If you could find an individual that is educated, professional, honest and supports his/her community, would this give you the warm fuzzy feeling you are seeking when entrusting your largest investment to a complete stranger?

Although there are no guarantees in life, here are some questions you can ask and information you can acquire that may give you insight regarding the list of positive attributes listed above.  So let’s get to it.

1.  Is your loan officer educated?  Anyone originating loans must have one of two designations.  They must either belicensed” or “registered”.  A Licensed Mortgage Loan Originator must complete a specified amount of training prior to taking a test, pass a national and state test and complete continuing education each year to maintain that license.  A Registered Mortgage Loan Originator is not required to complete any education or testing.  We will provide an article detailing all the differences between the two designations in the near future.

2.  Is your loan officer committed to his/her profession?  Although there are many ways to show their commitment to their profession, here are a few easy ones for you to check.  Is your loan officer a member of any organizations such as the Mortgage Professionals of Iowa and/or the National Association of Mortgage Professionals?

3.  Is your loan officer honest?  Clearly there are no absolute ways to determine this.  However, there are a few things that may make you feel more confident in your selection.  Has your loan officer earned the Lending Seal of Integrity issued by the National Association of Mortgage Professionals?  We will discuss this achievement at length in a future article.  If it makes you feel any better, background checks and credit checks have been required for all Licensed Mortgage Loan Originators since 2009.  Recently these requirements have been put in place for new Registered Mortgage Loan Originators as well. And lastly, do not be afraid to ask for references or testimonials.  They should have plenty.

4.  Does your loan officer support his/her community?  There are many ways to do this.  A few examples are sharing their skills and knowledge base with community groups or local schools.  Financial Literacy is a hot topic in many schools right now and there are many opportunities to give back.  You should ask the question and see if you receive any encouraging answers.

Will these questions guarantee a great experience with your lender of choice?  No, but hopefully it feels better than relying on dumb luck.

In all seriousness, if you have a loan officer answer “yes” to the questions listed above and provide proof and examples, you should feel confident you are working with someone that has a career in the mortgage industry instead of just a job.  The difference should be evident throughout the transaction.

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