How to Pick a Loan Officer When Buying a House: Tips from Local Expert, Stuart Broughton
One thing’s for sure: you can plan on having a lot of financial discussions once you embark on your homebuying journey.
That’s because one of the first things you’ll want to know is how much you can spend on a home—but also how much you’re willing to spend.
The best way to navigate these complex conversations is by having a team of trusted professionals to guide the way. One of these people is your loan officer—the person who’s responsible for evaluating your financial situation and securing a mortgage on your behalf.
But how do you know who to work with?
Here’s his practical advice on what you need to know.
SOMO Village: Let’s start with the basics. What is a loan officer’s role in the homebuying process?
Stuart Broughton: When you want to buy a house, a loan officer is person you go and see to make sure you have your financial ducks in a row.
We help educate clients on what the process looks like to get pre-approved for a mortgage. We break down the whole loan to see what’s possible for you to afford and what the payments will look like.
This process includes looking at your entire financial status as well as your preferences. We typically evaluate your:
- Credit score
- Income and assets
- Desired type of house to purchase
- Desired lifestyle (i.e., to determine what you’re comfortable paying each month)
It’s not like the old days when anyone who could breathe could get a loan! Today, we look at everything very thoroughly to ensure you check all the boxes.
From there, loan officers can give you a thorough overview of what you’re pre-approved for, what your monthly mortgage payments will look like, and how it breaks down into the principal, interest, fees, and other factors.
Let’s talk timelines. If a prospective homebuyer gets pre-approved for a mortgage, how long is their rate held for?
It is possible to lock in the pre-approved rate for a period of time, but most clients don’t tend to use this option because of the fees associated with it. You have to pay to lock in a rate for 15, 30, 45 days or more, which can add up. I offer this product, but most people opt to not go with it.
I typically tell people that the rate follows the property—once you’re in contract, then you can lock in the interest rate.
You can always call me or your loan officer up again to re-evaluate your financial situation, either if something on your end has changed or simply because the market is changing.
Especially with the rising interest rate environment that we’re in now, it’s no longer relevant if you were pre-approved five or six months ago.
I always try to get in touch with people who have been pre-approved to see if they want an update based on those rising interest rates. It’s good to know what you can afford based on current and up-to-date information.
Given the current interest rate environment, at what point should a homebuyer contact a loan officer?
You can talk to a loan officer at any point, but two to three months out is often a good timeframe because you can have current information to evaluate.
Credit reports, for example, are good for 90 days, so after that, you’d need to pull them again. I am able to do a “soft pull” credit report that doesn’t show on your record as an appointment for credit and affects your score. This gives me information to work with in advance of doing the official report.
And, again, if things change (i.e., interest rates) after you are pre-approved, it’s a good idea to talk to your loan officer again and work through the numbers another time.
What are some key characteristics to look for when choosing a loan officer to work with?
The biggest thing is to work with someone local.
Loan officers work with a lot of agents and companies in the local area so they know your name. And if you don’t pull through and things are going sideways, you’ll be known in the area for that. So working with a loan officer who’s known in the community is important because they want to maintain their good reputation.
Another thing to look out for is their relationship with local real estate agents and appraisers. You can ask your loan officer who they’ve worked with in the past and see what relationships they have. If they are working with other local professionals for a long time, there’s a level of trust there that you can count on.
Here are some other things you can look for in a loan officer:
- Reviews and referrals: Check out their Google reviews or on other platforms and see what people are saying about working with them.
- Knowledge and communication: Choose a loan officer who knows their products and knows their stuff and who is also able to communicate it clearly with you. You want to work with someone who can clearly explain things and answer questions you have.
- Transparency: Similar to good communication, it’s important to work with a loan officer who is transparent with everything. There are so many different moving parts and, ever since the 2008 crash, there have been much tougher lending standards. This is a good thing, but it makes it more complex and increases the need for loan officer transparency.
- Business structure: You might also want to look into how a loan officer operates. I’m currently a wholesale mortgage broker but used to work under a retail mortgage bank. In that role, I didn’t have the ability to shop for different products and had to operate under the company’s umbrella. But now I can shop around for different products to tailor options to clients and get the best rates for them.
Overall, the biggest thing is to choose someone local who you trust. From there, it’s about having open communication to ensure you end up with a house you can afford and are happy with.
If you’re interested in learning more from Stuart, check out his First-Time Homebuyer Webinar, co-hosted with local real estate agent Steven Cozza at Cozza Team. You can also contact Stuart directly by email at firstname.lastname@example.org or by phone at 415-987-8184.
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About Stuart Broughton:
Stuart Broughton has over 25 years of lending experience, adapting to the changes and challenges in the current mortgage industry. He and his team, The Broughton Team, work locally in Sonoma County to offer clients the best financing options possible. They are committed to closing your home financing loan as quickly as 15 days, often outperforming cash offers.
Stuart and his team take pride in offering impeccable communication and are available seven days a week for immediate assistance at any point in the process.