When you’re in the market to find a new home, it’s a big project, right? Potential buyers need to do a lot of homework – figuring out what size home they need, how many rooms, which amenities they need (and which they want), what area to live in, their budget, the school district, it seems like the list just goes on and on. And on.
And once all that is figured out, then they need to find the right Realtor® or the right home builder, go out and look at homes, imagine themselves living in that place and what the possibilities are. Then once they find “The Perfect Home,” there’s all that paperwork to do: Make an offer, open escrow, order inspections, check the title . . . seriously, it’s a LOT of work!
So it just makes sense that after all that effort has gone into the search, discovery, selection, and purchase agreement, homebuyers just want a “break” from all the hassle. It’s not their fault – they’re just exhausted and after all, they’ve done the hard part. Shouldn’t the rest of the whole transaction be a smooth piece of cake with really delicious whipped chocolate icing on top?
“Yes, it should,” agrees Rick Piette, owner of Las Vegas-based Premier Mortgage Lending. “However, while the tendency of most homebuyers at this point is just to turn over all the rest of the transaction to their Realtor® or builder, there’s just one more little thing they need to be aware of: The need to shop around to find the best mortgage loan.
“Look, we get it. Homebuyers just want to ‘get it done’ at this point. But by giving up just one step too soon – they may discover too late that one more hour of their time may have saved them thousands of dollars. Because yes – that’s how big the difference can be between mortgage lenders.”
“When homebuyers turn their choice of lender over to the decision of their Realtor® or home builder, what they’re doing is handing their financial future over to someone who has no vested interest in the outcome of that choice,” Piette explains. “Think about it: Who’s going to be paying that mortgage each month? Certainly not them. But even worse, they may have financial incentives to steer you to a particular lender – that can put money in their pocket, by taking it (in)directly out of yours.”
That’s no exaggeration, either, as explained in more detail on Premier Mortgage’s “KnowBeforeYouOweNevada.com” website. This quick two-minute video gives a simple overview of what Marketing Services Agreements are, why they exist, who benefits from them, and how you can protect yourself from the extra costs that may be involved if you use that “recommended” mortgage lender.
“Many homebuyers may feel like they’re questioning their Realtor® or builder’s judgment if they don’t go to the mortgage lender they suggest. It can put them in a difficult place emotionally,” Piette continues. “If you think about it, you’ve already spent a lot of time working with them up to this point in choosing your home, and a relationship has been developed during that time. So you may worry there would be hurt feelings if you go against their recommendation.
“But buyers need to keep in mind that above all, this is a business transaction. The outcome will affect your finances – not theirs. That’s why you need to be smart, take an extra hour of your time, and follow three simple steps to make sure you don’t end up paying more for your mortgage loan than you should.
- Get a Loan Estimate from at least two different lenders. (One can certainly be the lender your Realtor® or builder refer you to, and one should be a Mortgage Broker).
- Compare the Interest Rates
- Compare the Loan Fees.
“The interest rate and the fees are the only two things that really matter when it comes to the cost of your loan,” confirms Piette. “They allow you to compare the numbers as “apples-to-apples” between lenders to see exactly how much you’ll be paying.
“Once you know that, you’re equipped to make the best choice for you. And if your Realtor® or builder disagrees with your decision – just ask them to explain why you should pay more for your mortgage loan than you need to! (That should be an interesting conversation, don’t you think?)”
Premier Mortgage Lending, NMLS #393282, is located at 701 N. Green Valley Pkwy., Suite 125, Henderson, 89074. The full-service lender is a member of the Las Vegas, Henderson, and Boulder City Chamber of Commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.