Let’s face it, acquiring a loan to buy or refinance a home is probably the biggest financial decision most of us will make in our lives. Most likely your home loan will be the largest debt you have, and therefore requires important attention. Almost all of you, I hope, will chose to work with an educated professional in order to choose your loan program and to process it for you. This decision should not be made in haste. Just because you saw their name in the phonebook does not mean they are qualified to advise you in Real Estate Finance. Over the next six months my goal is to give you enough knowledge and insight into Real Estate Finance where you feel confident in choosing a loan officer to work with. It’s impossible to know everything involved in Real Estate Finance unless you make a career of it, but knowing some of the basics will provide you the security you need in making the right decision.

This is the first article in this series and is one of the most important. Choosing the right person to advise you in acquiring a loan has to be made correctly. Regardless of how much you know or how great your credit score is, it can be damaged by choosing the wrong person to work with. Obviously if you have a friend or family member who has recommended someone to you, I encourage you to meet with them. But even if a friend recommends you in a certain direction, there are things you still need to know and consider before making a decision.

There are certain questions you need to ask when interviewing loan officers to insure they can meet your needs. Whether they are a mortgage banker or broker, they all have access to different products. The first thing you need to find out is what programs and types of loans they can offer you. The loan officer that has access to all A, B, and C paper programs is not forced to sell you into a product that isn’t right for you. If you are an “A paper borrower” working with a “B paper” lender, it isn’t going to work out in your favor. The loan officer who has it all (mortgage programs) can match all types of borrowers with the loan program that is truly the best for them. It is in your best interest to know all available options.

All good loan officers will have many specific questions to ask you. This will let you know if they really want to help you or are just looking for their next pay check. Listed below are a sample of questions that a loan officer will need to ask you in order to meet your specific financing needs.

What is your purpose in buying or refinancing your home? How long do you plan on staying in this home? Is it more important for you to have low payments or pay off your mortgage? What are you short and long term financial goals? What is a total monthly payment you can afford?

If a loan officer doesn’t ask you those questions, you should reconsider that loan officer. You don’t know how many times I have interviewed clients where they are completely surprised at all the questions I ask them int the initial meeting. The perfect combination in a loan officer is one who has Real Estate Finance knowledge, access to all loan programs, and a person you can trust who is working for your benefit. Sometimes you can walk into an office and realize immediately that the feeling is right. This should be someone you plan on developing a relationship with over the years. Find a loan officer who you can be honest with and feel comfortable with. It would be ideal if you had a trusted friend in the industry, however only few have such a contact. Many educated and trained loan officers are out there willing to work for you. Make sure you take the time to find a loan officer you respect and respects you.

Next month I will discuss common terms you should know when acquiring a real estate loan.