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  • First Time Home Buyer Mortgage Rates You Can Brag About

  • Minneapolis, MN:  With mortgage interest rates near historic lows, and a lack on homes for sale, the Minnesota housing market is one of the most competitive markets I’ve ever seen in over two decades of mortgage lending.

    So what does this mean for home buyers?

    Simply put, sellers have many offers to choose from, and they are going to pick what they deem to be the best offer. Of course obvious picks will be the highest price offer, and no contingencies, like a house to sell, but a huge element that many home buyers mess up on is picking the wrong lender.

    While technically, there should be no Real Estate Agent bias with your choice of lender, the reality is that there is, and a poor perceived choice can hurt your chances of a successful offer.

    What Lenders Do Real Estate Agent Like?

    Real Estate Agents see and work with many lenders in their careers, and over time, see patterns of the performance of lenders. The biggest element is the actual Loan Officer, but companies have performance patterns too.

    Without fail, because of these patterns, Real Estate Agents prefer you work with a local lender. This means a lender with an office in the area you are buying the home, and a lender that they have had numerous interactions with.

    Because of poor on time performance records, having a pre-approval letter from a large outstate internet lender will put you at a serious disadvantage in a sea of offers.

    Next on their list of disliked lenders tends to be the large banks. This, like large internet lenders, tends to be because a large number of their Loan Officers are newer personally unlicensed Loan Officers who make many mistakes.

    So who do Real Estate Agents prefer you work with?  Many agents have preferred lender that they have worked with for years. They trust these Loan Officers based on experience from many transactions together. So their suggested Loan Officer is usually a good choice.

    When agents refer a Loan Officer, this usually falls into two categories:

    • Affiliated Lender
    • Non-Affiliated Lender

    Affiliated Lender referrals can be great, or something to beware of.  Is the referral because the lender/Loan officer is awesome, or is it simply because the boss pressures them to refer you to the internal company? Sadly, many affiliated companies never have the best rates and costs. One of the reasons they don’t have to have the best rates, is because they know you trust the agents referral, and you likely never shop around.

    If the Agents referral is to an non-affiliated lender/Loan Officer, this tends to be better, as you know the referral is likely because of overall service and rates, not because of any pressure from the boss to use the affiliated lender.

    The Bottom Line

    To increase your chances of an accepted offer, avoid internet and outstate lenders. Always pick a local lender, and especially if using the Real Estates own company, be sure to shop with at least one local non-bank mortgage lender or mortgage broker.

    Remember, the lender choice is always YOUR CHOICE. Anyone pressuring you is a sure sign to run the other way.

    Happy buying!