Smart Money Podcast: Save at Weddings, and Vet Mortgage Lenders

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.

This week’s episode starts with a discussion about how to save money as a guest during the 2022 wedding season.

Then we pivot to this week’s money question from Sarah, who sent us an email. Here it is:

“Hi! I have a question for the Nerds about selecting a mortgage lender. I purchased a house in 2017, and before starting the search process, I got preapproved through Rocket Mortgage. However, once I found a Realtor, she strongly encouraged me to get another preapproval through a local bank. Her reason was that the seller’s agents might not look favorably on a preapproval from Rocket if the bidding process got competitive.

Now that the housing market is orders of magnitude more competitive than it was in 2017, I’m wondering if there’s any truth to this? Are the large lenders slow and difficult to work with, and therefore put a burden on the seller in some way? Was Rocket still considered a new and unreliable player at the time? Alternatively, was she just trying to send business to her network?

Not sure if this is the right type of question for this podcast, but appreciate your consideration!

Thanks! Sarah”

Check out this episode on any of these platforms:

• Apple Podcasts

• Spotify

Our take

To avoid going broke during this year’s wedding season, prepare your mindset — and your budget. Start by reviewing your finances, so you understand how much you can spend on expenses, like travel, lodging and gifts. Also set clear expectations for what you will and won’t spend money on. A nice gift for the couple might be more important to you than buying a new outfit for the event, for example.

When it comes to getting referrals for a mortgage lender from a real estate agent, take any recommendation with a grain of salt. And do your due diligence. Getting preapproved by at least three lenders can help you shop for the best rate and also choose a lender you like working with. Be aware that once you have a mortgage, though, your original lender is likely to resell it to another lender.

In general, a preapproval from a major lender won’t be viewed as less competitive than a preapproval from a smaller lender. But in today’s market, cash offers will usually beat any preapproval.

A lot has shifted in the mortgage industry in the past few years, and we are in another moment of rapid change. After interest rates were slashed early in the pandemic, they are now on the rise. Rising interest rates are making buying a house more expensive.

Our tips

• Consider different types of mortgage lenders: Large banks, credit unions, regional banks and other options have different pluses and minuses.

• Shop around: Getting preapproved by at least three lenders can help you find the one you prefer and hunt for the best rates.

• Trust, but verify: Referrals can be helpful, but be sure to do your own research.

More about homebuying on NerdWallet:

Tips for First-Time Home Buyers

The Credit Score Needed to Buy a House

How to Get Preapproved for a Mortgage

Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear previous episodes, go to the podcast homepage.

Episode transcript

Liz Weston: This is going to be a record year for weddings. Is your budget ready? Welcome to the NerdWallet Smart Money podcast where we answer your personal finance questions and help you feel a little smarter about what you do with your money. I'm Liz Weston.

Sean Pyles: And I'm Sean Pyles. Let the Nerds answer your money questions. You can call or text us at 901-730-6373. That's 901-730-NERD. Or email us at [email protected]. And to get new episodes delivered to your devices every Monday, be sure to follow us wherever you get your podcasts. And if you like what you hear, please leave us a review and tell a friend.

Liz: In this episode, Sean and I are answering a listener's question about choosing a mortgage lender and when you should be suspicious of referrals.

But first, in our This Week in Your Money segment, we're talking with personal finance Nerd Laura McMullen about how to save money during the spring and summer wedding seasons.

Sean: All right. Welcome back to the podcast, Laura.

Laura McMullen: Thanks, Sean. Happy to be here.

Sean: You recently wrote an article titled “Please Don't Go Broke Attending Weddings,” which — I just love that title so much. Can you talk with us about the inspiration for this piece?

Laura: Thank you. The inspiration, you could probably guess it. I surely went a little bit broke last summer attending weddings. There was a couple months there where it felt relatively safe to go to outdoor events, and so I went to two weddings back to back. And, my word, that was a lot of money to throw around.

Sean: Uh huh. Travel, gifts, dresses, suits, everything.

Laura: Yeah, it sort of reminds me of what you talked about last week about when you start going to events that you may not have been going to when you're quarantining, you remember how much money it costs to leave the house — let alone go to a wedding.

Sean: Yeah.

Laura: So the couple weddings I went to last summer weren't even particularly fancy-schmancy affairs. I was just driving and staying a couple nights at a hotel and giving gifts. It really added up.

Sean: Yeah.

Laura: And, thankfully, we were able to have a family member watch our daughter and our dog. But if we didn't, you could tack on another couple hundred dollars for child care and pet care expenses.

Sean: That could have doubled your costs basically.

Laura: Yeah, pretty much.

Liz: How do you suggest people avoid going broke then, because this is supposed to be a record-setting wedding season? All these weddings that got put off are now going full-speed ahead.

Laura: Well, I'll give you a few tips in a bit. But first, I'm going to start really, really broad, because you don't know if something like a wedding is going to be a financial burden unless you know how much money you have to spend.

So I recommend, when you get that invite or that save the date, check your financial accounts, check your bank accounts, all that. Look up any sort of upcoming expenses you have. So you're looking at what you have to spend and also what expenses are on the horizon.

So if you're invited to a wedding across the country in August, and also your AC is on the fritz, you might want to keep that in mind that you might have an air conditioner expense and a wedding expense.

And also, as you're mapping out the financial stuff, put things on a calendar. Literally write these events on a calendar. Because, as one of my experts pointed out, it seems like weddings lately have become these multi-day affairs with day-before parties and day-after brunches — not to mention parties and showers and all that.

And when you write it out on a calendar, you can really visualize just how much time that takes. And remember: Time is money. That's time that you're not working. That's time that you're deciding to not spend doing other stuff. So that helps you really visualize how much money and time this stuff will cost.

Sean: Well, and every day you're there for an extra add-on, an extra scavenger hunt before the wedding, that's hotels, that's maybe getting another babysitter or a dogsitter. It just gets that much more expensive every single day you tack on.

Laura: Exactly.

Sean: In your article, you also suggest that folks shouldn't just check in on their finances but their feelings as well. Can you talk about what you mean by that?

Laura: I talked to a therapist who said if you are feeling compelled to spend money, or in my case even a little bit excited to spend money, take a beat to explore where that feeling is coming from. Just let it marinate a little bit and that might help you pinpoint what it is that you're actually looking forward to and want to spend money on and what you can just skip.

So, for example — for me, when I went to these weddings last summer, I think I just had pent-up excitement after quarantining for so long.

Sean: Right.

Laura: Yeah, I really wanted to get out there. I wanted to look good. You know?

Sean: Of course.

Laura: I've been in sweats and sweatshirts and nursing stuff for a year. But when I really reflected on it, I actually just wanted to be with other people. I wanted to be with my friends.

Liz: Yeah.

Laura: So that reflecting, in my situation, it's simple. But I didn't end up buying the hot $200 dress that I felt like I was going to look great in. Instead, I thrifted a jumpsuit. That worked just fine.

Sean: Yeah.

Laura: What I wore didn't affect how I felt about seeing my friends, for example. Other feelings you might have are just like obligation. Do you feel just obligated to attend every event that you're ever invited to? I do.

Sean: I do not, but I know a lot of people do.

Laura: I definitely do. Or, I felt obligated to write a pretty fat check for my gift for each of these weddings, just because that's what I've always done, and you're supposed to be nice.

Sean: Oh, god.

Laura: But, realistically, my financial situation has really changed since having a kid, and I'm giving wedding gifts to people who are in their 30s. You know?

Sean: Yeah.

Laura: They don't necessarily need my money all that badly.

Sean: Here's one thing that I have never been able to fully get over with weddings. Maybe it's because growing up I only ever attended hippie weddings on farms, but I never understood why you would have to pay to travel somewhere, pay to go there, do all of that, and then give a big, expensive gift on top of that.

It's like, isn't the presence the present? I don't know. I just, I can't get behind spending 200 bucks on a KitchenAid or something for a friend. To me, it seems a little bit silly. But maybe I'm in the minority here.

Liz: Well, I also think it has to do with your time of life. Because, in my time of life, it's my friends’ kids who are getting married, typically. And we're in a position where we can be a little more generous than in the past. And it's fun. It really is.

But you really have to look at your own means and your own situation and make decisions from there and not necessarily spend because you think you have to.

Sean: That's fair.

Laura: Totally. The gift question is interesting. Like I said, I talked to a therapist for this article who specializes on talking to couples getting married. But I also talked to a certified financial planner and to an etiquette expert.

And you could probably guess how this gift conversation went with each of them. The etiquette expert said, "Oh, you shouldn't be giving less than 50 bucks." More or less, she said that. I asked her, "Well, what if you wrote a nice note? What if you gave some of your time, your presence?" It was hard for me to get her on board with agreeing to that. You know? She's an etiquette expert.

Liz: Yeah.

Sean: Yeah.

Laura: Meanwhile, I talked to the financial expert who said, "Dude, give what you can give and not any more than that." You've done this financial check-in that we just talked about a couple minutes ago. You should have a pretty good idea of what you can and can't afford to give.

Liz: Yeah.

Sean: Yeah.

Laura: This was pretty eye-opening for me, because, like I said, for these weddings this summer — for both of them, we wrote pretty big checks. And then I'm so chatty at weddings, and I love interviewing people. So I actually ended up talking to a lot of other people at the weddings and also later to my co-workers, who were like, "How much did you give?"

Turns out I gave way too much. I talked to a co-worker here at NerdWallet, where we were pretty obsessed with saving money. And my co-worker was like, "What? No. You get the medium-level thing on the registry, and you move on."

So that was pretty eye-opening to me. And again, this is such a personal decision. Like Liz is saying, it depends so much on your personal finances.

Sean: Yeah.

Laura: If I was a DINK three years ago — double income, no kids — three years ago, sure, I'll write a three-digit check. But now, it's just different. I've got a kid, and I live in an expensive city. It just doesn't really make much sense for me to be writing a big check to my friends.

Sean: And my impression is that you will probably remember what you give the couple longer than the couple will. They are getting so much stuff — they might have a hard time recalling, "Oh, I got the mugs from Laura. I wish that she'd given me these nice wine glasses instead." They're probably not going to care. That's my impression.

Liz: We just celebrated our 25th wedding anniversary recently and ...

Sean: Congrats.

Laura: Congrats, Liz.

Liz: Thank you. I don't remember a thing that I ... No. Actually, no. I remember two things, because they were both handmade. What I remember is every single person who was there.

Sean: Yeah.

Liz: So if that helps anybody who's listening decide, “Should I send a great gift, or should I send myself?” If this is somebody you care about, try to send yourself. I think it makes a big difference.

Laura: I'm a pretty schmaltzy person, and I'm just big on writing notes. I mean, it doesn't have to be a three-page letter about your love for this person getting married, but just taking a beat to write a personal note — that really goes far.

Sean: We've talked about a couple ways so far to save money on gifts, but what are your other tips for saving money while attending weddings?

Laura: You don't have to stay at the hotel or the lodging that the couple recommended. Scout around for cheaper locations. Find opportunities to split costs with other guests. Maybe that means splitting a hotel room. Or instead of a hotel room, finding some sort of alternate lodging situation. Stay with a local friend, for example.

You do not have to attend every single event. Like Sean had mentioned, if you just don't go to the night-before party, you save a whole night at a hotel possibly. Or you save some time if you don't go to the next-morning brunch, for example.

And same with bachelor, bachelorette parties, showers, shuffles, whatever we're calling them — it's totally fine to skip those if it's not in your budget, or if you just don't want to. All I say here is give the person getting married plenty of heads up, and be graceful about it.

Liz: Well, thank you so much, Laura. That was super helpful.

Laura: Sure thing. Happy to be here.

Liz: And one last thing before we get into this episode's money question. If you haven't heard, we're running a sweepstakes ahead of our Nerdy Book Club episode. This time around personal finance Nerd Kim Palmer is interviewing Paco de Leon, who wrote a book called “Finance for the People: Getting a Grip on Your Finances.”

Sean: To enter for a chance to win Paco de Leon's book, all you have to do is email [email protected] with the subject “book sweepstakes” during the Sweepstakes Period. Include the following information: your first and last name, email address, ZIP code and phone number.

And here is a brief disclosure about the sweepstakes courtesy of the NerdWallet legal team. The Smart Money podcast book sweepstakes is sponsored by NerdWallet. No purchase necessary. Void where prohibited. Must be a legal U.S. resident 18 years or older to enter. Entries must be received by [midnight PST] April 20th, 2022. Visit nerdwallet.com/bookclub for more details.

Liz: Excellent. Now we can get into this episode's money question.

Sean: Let's do it. This episode's money question comes from Sarah, who sent us an email. Here it is.

Listener: "Hi, I have a question for the Nerds about selecting a mortgage lender. I purchased a house in 2017, and before starting the search process, I got preapproved through Rocket Mortgage. However, once I find a Realtor, she strongly encouraged me to get another preapproval through a local bank. Her reason was that the seller's agent might not look favorably on a preapproval from Rocket if the bidding process got competitive. Now that the housing market is orders of magnitude more competitive than it was in 2017, I'm wondering if there's any truth to this. Are the large lenders slow and difficult to work with and therefore put a burden on the seller in some way? Alternatively, was she just trying to send business to her network? Thanks."

Liz: To help us answer Sarah's question, on this episode of the podcast, we're joined by mortgage Nerd Kate Wood. Welcome to the podcast, Kate.

Kate Wood: Thank you so much for having me.

Sean: Kate, it's great to have you on. And one quick note before we get into the conversation: Rocket Mortgage is a NerdWallet partner, but that does not affect how we are talking about them in this conversation.

At a high level, let's start off by talking about what it means to be preapproved versus pre-qualified for a mortgage.

Kate: The difference between preapproval and pre-qualification is sort of like the difference between having a driver's license and a driver's permit, right? The permit just means you could drive, whereas a license shows that you can drive. Someone has tested you on this. You're good to go.

It's pretty similar. Pre-qualification, it's really just relying on information that you provide to the lender.

Sean: It's like based on these theoretical qualifications, you could get approved for a driver's license or mortgage, whatever.

Kate: You could take the next step. With a preapproval, the difference is that you've let the lender actually verify some of your financials. So they've done a hard credit inquiry. They've checked up on some other things. And so the amount that they're saying that they could lend you has a basis in actual numbers, in your actual financial picture.

Sean: Right.

Kate: So they're giving you something. While it's not a guarantee, it's saying, yes, you could do this, right? So it's sort of like the driver's license of, yes, you can take the wheel. This person can drive a car.

Sean: You've passed the test.

Kate: You passed.

Sean: Our listener is wondering why a preapproval from a big-name company could be potentially less competitive than a preapproval from a local lender. What's going on there, do you think?

Kate: So this is — I wouldn't say is necessarily the case. Whenever you're in a multiple-offer situation, the home seller and the seller's agent are going to look at multiple different aspects of the offers. Sarah is definitely right. The market has changed tremendously over the past several years. And that's probably an understatement.

Sean: Yeah.

Kate: These days, someone who finds themselves in a multiple-offer situation, probably the first cut they're going to make is cash versus financed offers, because sellers do love cash, and we still are seeing a lot of cash buyers out there.

But even assuming that the seller's only looking at financed offers, people who are using a mortgage to buy a home, they're probably going to look at variables like what's the price you're offering, the size of your down payment, and even the kind of loan you're using, well before they would get into something like which lender the buyer's using.

Sean: Right.

Kate: Something else that I think is worth considering is that the specific lender you're preapproved by being familiar to the seller's agent or to the seller — that could be a plus or a minus. Just because they have experience with them, doesn't mean they necessarily had a good experience with them.

Liz: Oh, good point.

Kate: So your agent could have a really good relationship with a loan officer at your hometown credit union, but maybe the seller's agent, who's also local, has had interactions with them that weren't so great.

Sean: Yeah.

Kate: So that could go either way. And same thing with a larger lender as well.

Sean: When I was shopping around for mortgages and talking with my real estate agent, this didn't come up at all. It was basically up to me to find the lender I wanted to go with. It took me quite a while to do so, because I applied for five different mortgages to see where I could get the best rates. And that was on me — 2020, I had nothing else to do in the pandemic. But my real estate agent, she couldn't have cared less.

Kate: I had exactly the same experience. I bought my home in 2020. The market was already really heating up. It was imperative to have a preapproval. If you were a financed buyer, if you were going to view a house, you needed to be able to essentially show the seller, show the selling agent right off the bat I could actually do this, I could actually buy this home.

But who was potentially willing to underwrite that loan — that never came up even once.

Liz: Well, I have some thoughts about this, but we'll get to those in a moment. Maybe we should talk about the idea that larger lenders are going to be slower or more difficult to work with than a local lender.

Kate: In the scheme of things, any lender could be slow. I would say the advantage here is that if something is holding up your closing — because this is mostly during underwriting, that this would be a concern. So you've had an offer accepted, and you are waiting for the deal to actually go through the lender to say, "OK, yes, we can close. We're going to give you this money."

If things are going really slow, and you don't know why — and say you're using a regional credit union, if your agent knows someone there, they can probably just call them up, say, "What's the problem? Get this taken care of."

Liz: Yeah.

Kate: And get the thing moving again. With a larger lender — unless you are, for example, say you're working with a mortgage broker, and so that person has some kind of a relationship with them — you might be at the mercy of an underwriter returning your call or email, which I will say that was my experience working with a major lender when I bought my home.

Everything moved really, really, really quickly until I had fully submitted the loan application. Once we were in underwriting, it was hard for me. It was hard for my agent. It was hard for the seller's agent to get answers to really any requests. But I didn't take it personally.

Sean: Well, there's an aspect of the mortgage process that is a two-way street. They ask for so many documents from you.

Liz: Oh yeah.

Sean: So, in a way, you have to be quick to respond as well, and that can help them move faster if possible.

Kate: Absolutely, yeah.

Liz: I'm just curious about being steered to the local lender. That makes me suspicious of the agent.

Kate: So it kind of depends if the agent is getting any kind of direct benefit from that referral. You referred to steering. So that was a practice that was common where mortgage brokers were steering clients to specific lenders who would basically give them financial kickbacks, which is now super illegal.

Sean: Yeah. I can see why.

Kate: But that's not to say that something like that couldn't go on. So if the agent were getting that kind of direct benefit, that would be a big no.

Similarly, if the agent — whether it's a lender, whether it's another service provider that you might be working with to get the loan — if the agent has another type of relationship with them, it's like, “Oh, this is my brother-in-law's business that he's trying to get off the ground,” or “Oh, this person's my good friend,” and they're just trying to help that person, you don't need to be obligated in them doing someone else a favor. That's also a real no.

In general, a buyer's real estate agent should have a fiduciary interest in you. So they should be taking what will benefit you the most as the bottom line, not themselves. So you really want the focus to be on what is going to work for you — not on them getting money, not on them helping people in their network, and not on them ensuring that the deal gets done quickly or that it'll definitely close.

Sean: We should also point out that after you have your mortgage approved, and you are making payments on it, the mortgage company that you originally went with is probably going to sell your loan and is going to be serviced by another company.

So for the purposes of homebuying and acquiring a mortgage, think about what you want out of that company for customer service and interface. But after you have the mortgage, it's not really up to you anymore.

Liz: Yeah. I think a lot of people are surprised by that. Right, Kate?

Kate: Yeah, absolutely. What we're talking about here is really your mortgage originator, right? So it's the company that's making you the loan. The company that then you pay the mortgage to — and if you have questions or something comes up, you get in touch with them — that's the loan servicer.

This can be the same company, but more often than not, lenders do resell the loans more or less immediately, giving them the capital to go on and make more loans. This is sort of just the business model of a mortgage originator.

But it's something that can be really surprising to people, especially if you've put in a lot of effort to do your homework and find a company that you really like working with. It's sort of like getting dumped on your honeymoon.

Liz: Oh gosh, yes.

Sean: I took a long time to choose my mortgage originator, and they were a good midsize company, great customer service.

And about a month ago, which was maybe six months after I actually closed on my house, they sold my mortgage to this big national bank that I had been trying to flee from for years. They had my bank account that I had since I was in high school. I finally moved to a local credit union to get away from this bank. And then, low and behold, now they have my mortgage.

So I'm back with them. There is no escape. And that was a rude awakening when I got that piece of mail telling me, "Oh, by the way, your mortgage has been acquired." So, it just happens.

Kate: Yeah.

Liz: It does.

Kate: That was something that, while I was going through the loan application, I asked about it. I said, "Oh, who do you think my loan will be sold to?" And the loan officer said, "Oh, actually, we service almost all of our loans." Which really surprised me, but I think not as much it surprised him that I asked, because hardly anyone actually ever asks about that.

Sean: Right.

Liz: Yeah.

Sean: But there are some benefits to tapping your local network and that of your agent, like getting connected with contractors and things like that, right?

Kate: Oh yeah, definitely. I would not come out and say, "Oh, referrals are a bad thing." Referrals are absolutely not necessarily a bad thing.

But whenever anyone is recommending someone to you — regardless of what they're recommending or whether the person who is doing the recommending is your agent, a friend, a relative, whoever — just ask them, “Why are you recommending this person?” Did they work with them?

Do they have some kind of other relationship with them? Do they know that they're good at this particular type of thing? Take that little extra step of not just saying, "Well, you know, this person's a really good friend, so I trust them; this will make it faster." Do your own homework.

You take a couple minutes, do an internet search, look them up, find reviews. Depending what they do, you might look at licensure and stuff like that. If you can, don't just be like, "Oh, OK, you recommended them, so let's go with that."

Sean: Yeah. Well, one area where we recommend folks not take the recommendation of their real estate agent is when it comes to finding a home inspector. At NerdWallet, we recommend folks choose their own home inspector, versus the one that the agent would refer to you. Can you talk about why that is?

Kate: Yeah, absolutely. If I can go ahead and use yet another driving metaphor for some reason.

Sean: You've got the green light to do that, too.

Kate: Yes, thank you. All right. Pedal to the floor — let's go. So say you're buying a used car from a dealership. And you don't want to buy a lemon. You want to get it checked out before you sign on the dotted line. So you want to get it checked out by a mechanic, right? You wouldn't take it to the mechanic who works at the dealership. You would take it to another mechanic.

Sean: Right.

Kate: You don't want someone who has any kind of vested interest in making this deal go through. So with an inspector who's referred by your agent, there is always the possibility that they could just be focused on making sure the deal goes through, making sure things are easy on the agent, that just this will get done.

You don't want them to overlook something. You don't want them to not disclose something. Nothing against home inspectors, particularly home inspectors that are affiliated with one or both of the major trade associations. [They are] absolutely are meant to adhere to a code of ethics and generally do.

But it's always a safer bet to go with an inspector that you've found and that you've chosen, because this is someone who you assume that they'll have your best interests, but you really need to know that they will have your best interests.

Sean: Yeah. And this is interesting because when I bought my house, I didn't know that this was even a thing to think about. The home inspector who did my inspection — I don't even know where they came from. I think that maybe my real estate agent recommended them? Maybe it was the builder of the house because I bought a new build?

Kate: Oh.

Sean: And now hearing what you've just laid out, that could have potentially not gone well for me ...

Kate: Yes.

Sean: ... based on conflicts of interest.

Kate: It's definitely an area to be cautious, because the home inspection contingency is one of the ones that — depending on how you have it worded in your actual contract — is often sort of your last line of being able to walk away from the deal and keep all your money, right? Get the earnest money back, all of that. So you really want to be confident in your home inspector.

Liz: So Kate, our listener asked about how things have changed since 2017. What else has changed in the mortgage market since then?

Kate: Roughly everything.

Liz: OK. All right.

Kate: I mean, it's not like the Industrial Revolution or something. But, I mean, there’s been a lot of people; there's been a lot of change.

No surprise — the pandemic has had a huge influence and then also sort of changes in the broader economy and changes within the housing market. So now things are starting to change, and it's almost easy to forget that this was just two years ago.

But, so two years ago, March 2020, the Federal Reserve did a surprise rate cut, and that kicked off this frenzy for refinancing where just ...

Liz: Yes.

Kate: ... everybody was dropping everything and refinancing. This also kicked off an incredibly hot sellers market. And so all of a sudden, lenders had more business than they could handle kind of out of nowhere.

Liz: Yeah.

Kate: Because we're also coming off of lockdowns and stuff like that in some places. But at the other end of the economic spectrum, there were homeowners who were struggling to pay their mortgages, whether because of a lost job or lost wages, or because they were incurring heavier expenses potentially due to medical bills and stuff like that. So lenders that also service loans were working with borrowers who were seeking forbearance or other kinds of assistance.

So they have all these people who are reaching out to them for different reasons. Also, at this time, COVID's going on. We still don't have any kind of sense of how to deal with this. So this is the washing your groceries sort of phase of COVID.

Liz: Oh, yes.

Kate: So lenders are going through all these transitions; staff are working remotely, or they're having people in a reduced capacity. If they have call centers or offices that are open, they've got fewer people per shift, they're keeping them apart from one another.

And so all of those factors combined to create this situation where we just saw lenders really, really pulling back to spending some loan products, bringing in stricter lending guidelines. In particular, higher credit score minimums was a really big one that we saw. And this was really lenders trying to reduce their risk during an unsettled time.

But also, working with limited capacity and also just this wealth of potential customers, they could really afford to turn people away. And that was something ...

Liz: Yeah.

Kate: ... that I experienced in spades when I was shopping for a home during this time in summer 2020. Now, here we are a few years later, rates are rising, everyone's sort of acclimated to COVID.

We're already actually seeing a drop in refinances for the first time in quite a while. The volume of loan purchases is larger than that of refis. Everything that I just said could be changing. At the same time, though, given how many people are still in the market trying to buy homes, it's hard to make a prediction.

Liz: Yeah, got it.

Sean: Well, bringing you back to Sarah's question, it seems like even though a lender could have been potentially slow and difficult to work with in 2017, it might be a magnitude more difficult and slow to work with in 2022?

Kate: I mean, it's hard to say. When you look at the statistics of how long, in general, loans are taking to close, it's not as bad as it was during the depths of COVID, where you were seeing an average that was around 50 days, you know?

Now it's more around 30 business days, which is pretty normal. But you will talk to different people who've bought or refinanced, and you will hear horror stories where it's like, "Oh my goodness, this cash-out refi took me six months."

Sean: Geez. Well, Kate, do you have any final thoughts about shopping around for mortgages as it relates to our listener's question?

Kate: Sure. I mean, honestly, the biggest thing just is to shop around at all. Regardless of whom you're getting a recommendation from, there's no reason not to consider that local lender that maybe someone is recommending to you, as well as a lender where they had a cute Super Bowl ad or a bank that you already work with that can help you on closing costs if they're giving you discounts on fees and stuff like that.

The biggest thing really is just to consider more than one mortgage lender. It's consistently surprising how many people only actually go through their preapproval process with one. At NerdWallet, we generally recommend at least three.

Sean: That can help you get the best deal with the mortgage you end up choosing, because as I mentioned before, I got preapproved from five different lenders. I put all of the information they gave me into a spreadsheet and then thought through who I wanted to go with based on the factors I had in that spreadsheet. And it helped me feel like I was making a very informed decision.

Kate: You were indeed making a very informed decision.

Sean: Thank you.

Kate: I would love to hear that more borrowers were going to that much trouble. Because the thing is, taking the time to compare “this lender will give me this rate, versus this lender will give me this rate,” can take a mortgage calculator and look at it and see the difference in terms of both what you'll be paying as a monthly payment, but also depending on how long you're going to keep that loan for, how much money you could stand to save over the life of the loan.

Sean: Great. Well, Kate, thank you so much for talking with us.

Kate: No, thank you for having me. This was super fun.

Sean: Now let's get into our takeaway tips, and I'll start us off. First up, consider different types of mortgage lenders. Large banks, credit unions, regional banks and others all have different pluses and minuses.

Liz: Next, shop around. Getting preapproved by at least three lenders can help you find the lender you prefer and nab the best rates.

Sean: Lastly, trust but verify. Referrals can be helpful, but be sure to do your own research.

Liz: And that's all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at [email protected]. And visit nerdwallet.com/podcast for more information on this episode

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Sean: And here is our brief disclaimer thoughtfully crafted by NerdWallet's legal team. Your questions are answered by knowledgeable and talented finance writers, but we are not financial or investment advisors. This Nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.