A Simple Mortgage Trick To Avoid

Two loan officers were in the woods and along came a very large, hungry grizzly bear.

Immediately, one loan officer panicked:

“How are we ever going to outrun this hungry grizzly bear?”one panicked loan officer asked the other.

The calm loan officer replied: “I have no idea. All I am going to do is try to outrun you.”

An Old Mortgage Trick

When you are shopping for a mortgage, don’t fall for one of the tried-and-true, oldest loan officer tricks in the book. Most loan officers know that if a consumer is shopping for a mortgage, they will get multiple Good Faith Estimates. These Good Faith Estimates outline the “details” of the loan that you are offered from a lender - the interest rate, the fees, the monthly payment, etc and are your best way to actually compare loan terms between offers.

How The Trick Works

If you are speaking with a loan officer and he asks you “do you have any other Good Faith Estimates yet” and you reply “yes”, he will sometimes just ask you to send him what you have and he will see if he can “beat it”.

If you reply “no” to his question, he then will tell you to go get a couple of Good Faith Estimates from other lenders and then he will see if he can “beat it”.

Why Is This a Trick?

The reason I consider this to be a “trick” is because it is the lazy way out for a loan officer. I have rarely if ever seen a consumer save money with this approach - because the loan officers I have seen who do this also have a variety of other “tricks” they use that end up costing you time, money or both.

What Can You Do To Avoid This Trick (And Others)?

Start by obtaining mortgage quotes from Zillow’s Mortgage Marketplace. You should receive many different solid offers from many different loan officers at many different lenders.

Or, if for whatever reason  you don’t want to use Zillow’s Mortgage Marketplace and must shop for a mortgage the old way… make sure that you don’t show one loan officer’s Good Faith Estimate to another one!

February 24, 2009