With the VA mortgage, you want a Specialist, not a Generalist.
Mortgage Loan Officers run the gamut from Great to completely clueless about VA loans. You wouldn’t go to your regular doctor for heart surgery, you’d go to a Heart Surgeon, right? First, let’s decide if you want to go with a Big Lender, like Quicken/Veteran’s Home United, or a smaller, local mortgage company.
Here’s the Pros and Cons of each:
Big Mortgage Lender/Bank:
Pro – nice office, looks reputable
Pro – bigger operation, so they have staff that knows what they are doing
Pro – easy to find on Google, as they advertise like crazy
Con – you can NEVER see what they are charging, they can bury fees in your interest rate, and they are not required to tell you
Con – big office = big overhead (you’re the one paying for the overhead, in your mortgage fees)
Con – MLO’s at banks are NOT required to get licensed through the NMLS system (National Mortgage Licensing System) because they got a nifty little exemption after the 2008 mortgage reform.
So, your bank MLO with his nice desk and nice office?
Might have gotten hired yesterday, and YOU’RE THE crash-test dummy – don’t be the loan he/she screws up, and go with a Pro instead!
Con – even though the “Lender” closes in their name, most sell the loan off immediately, so they are really just borrowing money for 1-5 days until they sell your loan off. Then rinse and repeat.
Pro – Local, knows the area, know the city regulations, know how title works in your area, and you can drive to their office and handle things in person, if needed
Pro – shops your deal to multiple lenders, and finds the best deal on interest rate and fees
Pro – smaller operation, less overhead, easy to get your MLO on the phone.
Pro – likely more experienced, if they were a MLO at a lender, and switched over to be a broker.
Pro – must disclose ALL fees, including their compensation. No way to bury hidden charges in the interest rate.
Pro – spends less on advertising, works with local Realtors by referral – this can be HUGE, because the MLO is going to make sure you’re happy – or the referrals from his realtors stop.
Con – likely a smaller office, not as much staff
The Clear Winner?
YOUR LOCAL MORTGAGE BROKER!!!
In case you haven’t guessed, I used to work at a Lender, but have been a mortgage broker since 1998. So, while I’m biased towards mortgage brokers, because I am one, it’s the truth – you’re very likely better off with a local, trusted, mortgage broker. That being said, there are good and bad MLO’s at both lenders and brokers, so use your judgement. But using someone local is definitely better, in my opinion, after 27 years in the trenches doing mortgages.
Here’s how to make sure your MLO is as good as he or she says:
To find out if your mortgage “expert” was selling cars last month, or has been in the business long enough to know what they are doing.
Just go to www.nmlsconsumeraccess.org and search your loan officer’s name. You’ll see their employment history for at least the last 10 years, and be able to see if you’ve got a Pro or an idiot on your hands.
As of this writing in 2022, there has been a absolute flood of Newbies into the business, so watch out, if they just started in the mortgage business during the 2020-2022 refi boom, they likely can’t close your deal very effectively. Find yourself a local mortgage pro, either through your realtor, or Google “Mortgage Broker near me” and sift through the reviews. (or Google “Rick Foxx Mortgage Broker Clearwater FL” and be done with it, if you are in Florida www.FLVMC.com )
Next, find out if the Mortgage Loan Officer knows VA or not, here’s how to do it:
To see if your MLO knows VA, ask them “Can you get my Certificate of Eligibility from the VA”? If they have direct access to the VA Portal, then move forward, if they do not, proceed with caution!
They should have DIRECT access, if they do any volume of VA mortgages, period.
If you call my office, for example, I can log right into the VA portal, and with just your name, social security number, and DOB, I can pull up your COE (Certificate of Eligibility) in about 5 minutes, and know what you’re qualified for immediately. So, if you get a Mortgage Loan Officer who asks YOU for your DD214, or for your COE, I suggest you run in the other direction, immediately. Because that’s a sure sign that they don’t do many VA loans, if they did, they would have direct access. YOU shouldn’t have to do really anything for your COE, the mortgage company or loan officer gets it for you. The only exception is if you’re a Vietnam or earlier Veteran, some of these records (very few actually, but it does happen) are not updated on the VA portal, so we have to run a manual COE, but this is extremely rare.
Many MLO’s don’t know VA loans very well, and only do them if they stumble upon them.
Just make SURE you get an MLO that knows VA! This is NOT the time for Amateur Hour.
You’ll get better service, a faster closing, and less hassle, if you go with the more experienced, VA-knowledgeable loan officer There is NO extra charge for using a Great VA loan officer, vs. A “newbie” or a Generalist. Go with a Pro! You’ll thank me later, after your loan closes on time and as scheduled.
Let’s take a look at the VA Mortgage and get started!