When We Do/Don’t “Take” Loans From Other Lenders; 1/4 Percent Rule
We constantly get contacted by borrowers who are already working with or approved by other lenders. Sometimes borrowers come to us before they get their offers accepted, at their Realtor’s urging, b/c they need our speed and reputation to make their offers competitive.
Borrowers also come to us b/c their current lender misled them, or can’t perform for a variety of reasons. In these cases, we are happy to step in and play “hero.”
If, however, borrowers are just “rate-shopping” and have already locked or are in contract with another lender that is performing, we will not attempt to take the business unless we can improve the rate by more than 1/4 percent. This is our policy for a variety of reasons:
1. Rates move every day, and a loan officer should not be punished for locking at the wrong time when nobody actually knows the best time to lock.
2. Rates affect payments much less than most people realize – around $60 for a 1/4 percent change on a $400,000 loan, and even less “after tax benefits.”
3. Pre-approvals are expensive and far more work than most people realize. Loan officers deserve the fruits of their hard work and money.
4. Rates are extremely low overall, and in this rate environment, almost all rates are a gift.
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646