At thirty-five years old, I have gone through the mortgage loan process three times. First, when I was twenty-three, my wife and I bought our first house. We were young, stupid, and so excited to be buying our first house that it never occurred to us to shop around for a mortgage company. Our home builder offered financing and we signed up immediately. At the closing I recall being rushed to sign the documents, pushed into buying down points and feeling generally helpless when confronted with a process that was confusing and intimidating.
Two years later we refinanced our mortgage. This time we shopped around for the best possible interest rate. We also avoided mortgage loan officers that we didn’t like personally. At twenty-five years old I made the decision not to do business with people I don’t like, and I still follow this rule today. This rule makes a lot of sense if you think about it. A mortgage is a process that creates a lot of questions for most people. When I have a question I want to be able to call someone and get an answer. If I don’t like the person representing me in something, I am less likely to call them to get information. So by only doing business with people I like, I am more likely to call my agent when I have questions and as a result I am better informed. This may sound strange but it works for me. This time around, we were still confused and intimidated by the paperwork but we did not end up with the feeling that we were taken advantage of by the lender.
Now we come to the present time. I am thirty-five years old and going through the mortgage loan process for the third time. Things have changed! Before filling out the loan application I was given a document called a Good Faith Estimate which basically tells the borrower what costs may be associated with the mortgage. I also received a Truth in Lending Act disclosure which contained a lot of interesting information about taking out a mortgage. I read every word of every document I received. I feel better informed about the process than I would have thought possible and I feel in control of the situation. I also have a great loan officer who emails and calls me regularly. If you are in the Dallas area and need a loan officer, email me using the contact link and I will give you his name and phone number.
Now, I don’t believe that the mortgage companies offer all this information out of the kindness of their hearts. In recent years Congress has enacted many new laws which control how mortgage companies do business, in order to protect unsophisticated and uninformed borrowers (see paragraph 1). Whatever the reason these new rules have been implemented, the result is that borrowers now have the means of educating themselves about the mortgage loan process if they choose to take the time to read the documents provided to them.