IS A MORTGAGE LOAN A COMMODITY?

SR at ComputerI’ve heard many of my piers comment that “mortgages have become a commodity”. If that’s true, it’s a shame, or at the very least a misconception. What is a commodity anyway? The official definition states “an article of trade or commerce, especially a product as distinguished from a service”. So, when shopping for a mortgage, are you looking for a product or a service? Hopefully both. But which do you weigh more heavily?

The internet has become one of the most widely used tools for researching, and shopping for products. So understandably, those considering a new mortgage will turn to the internet for general information, current interest rates, and lenders. And if it’s on the internet, it must be true – right? Yeah, right. The internet is a great tool. But ask anyone in the know, and you’ll discover that the computer should be used to educate yourself, but NOT to purchase a mortgage. That is, unless a mortgage is a product. Sure, a 30 yr fixed rate loan is the same, no matter which lender provides it. And, if the rate and fees are the same, then the product is identical. The problem is, when you buy a mortgage, you don’t get it immediately. Someone has to orchestrate a team of real estate professionals to take your mortgage from application to closing. And that’s when this product becomes much more of a service.

Let’s say you’re headed off for a grand vacation in 10 days. And you need a new bathing suit for the trip. You know exactly what you want, so you head to the internet to find the best price. After ordering, the suit doesn’t arrive in time, and you find it sitting on your doorstep upon your return. Now take that disappointment and imagine how much worse it would be if it was YOU sitting on the doorstep. The doorstep of your new house that you DIDN’T purchase today because the low cost lender wasn’t ready. Even though they promised they would close on time, and they now have 100 excuses, they simply can’t close. What in the world? A non-local lender who doesn’t have an interest in the local community, and no real ties to the area? Wouldn’t you have rather worked with someone with a genuine interest in you – with a team of local professionals working on your behalf?

Oh sure, they’ll most likely get you closed in a day or so. But what about the seller who needs to move to his new house? Or, your furniture on the truck. Where is that supposed to go? And now you have to call the utility companies back to reschedule the date for those to be turned on. And I guess maybe check into a hotel, because you’ve already moved out of your old house or apartment. “Well, we tried” says the voice on the other end of 1-800-bestrate. (It happens more than anyone realizes.)

A deal is not a deal, if you don’t get what you’re paying for. And so I ask again: When you’re buying a mortgage, are you buying a product or a service?

Obtaining a mortgage is one of the largest financial decisions you’ll make. Choose local, and from a seasoned professional. (Check the definition of seasoned.) You’ll be glad you worked with someone who answered 100 questions, was there face to face when you needed it, and made the process smooth and stress free.

 

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