With so much information available through the web today, shopping for a mortgage can be overwhelming. While most “rate” advertisements would love for buyers to think a mortgage transaction is as simple as a purchasing any commodity, the fact is, there is a lot more to a mortgage transaction than can be conveyed through a simple rate quote.
Shoes or a Mortgage?
For a moment, let’s compare shopping for a mortgage with buying any tangible consumer good, like a pair of shoes. You can go to Zappos or any “.com” retailer, review a product and make a purchase. If you know what you want, what to expect, how it feels and how long it will last, then online retailer may be your best source for pricing and convenience. After all, you have the knowledge and experience relative to what you want. With mortgage rates all over the internet, it is easy to apply the same mentality for selecting a mortgage company, as well as fall victim to the lowest quote/price is the best source for the mortgage. Possibly true if execution, fulfillment, and expertise are all the same from one company to the next.
Money is a Commodity, but Service is Not!
First hard fact…it is not the same. Don’t lose sight a mortgage transaction is a “service” and not a commodity. Why? Several reasons.
First of all, commodities (such as shoes), are typically something you buy frequently. A mortgage transaction is something even the most transient people only deal with on average every five or six years. Most commodity purchases are much more frequent. More frequent transactions allows a buyer to better follow style trends, technological advances, material make ups, and price points for quality. In the mortgage realm, the same trends are occurring. It may be in the form of regulatory changes, credit underwriting, product guideline changes, market or political influences, and countless other factors. A shoe made five years ago is different than one made today, but purchasing 20 shoes over the five year period keeps the consumer “plugged into” the product. Not true with a mortgage. What separates the experience from a basic commodity purchase, is the knowledge, expertise, and guidance of a Loan Officer.
A Good LO is Valuable
Talented Loan Officers (LO’s) provide the variety of information relative to the buyer/borrower’s financial profile and needs. They are providing experience from overseeing a steady flow of transactions with various products and clients with very diverse needs and goals. They are a professional and they are keeping up with trends and product variations to make sure the customer is well-informed and in the best possible position to succeed into the future. Remember, a mortgage transaction is a “service”, and finding the right LO is equally or more important than selecting the best rate.