Computer search helps buyer find best home loan

By , Special to The Christian Science Monitor

With home sales on the rise, buyers now face a major problem: how to obtain the best possible financing for their newly purchased home in today's highly diversified home mortgage market.

A few years ago, for example, there were about a dozen basic forms of home-mortgage loans available. Today there are more than 200. And the terms for individual loan types can vary widely from lender to lender.

The fact is, it's a very competitive field.

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With dozens of lenders in major markets offering such diverse loans, how can a home buyer be sure he's getting the right loan to meet his need at the most favorable terms possible?

A newly launched computerized program is helping buyers achieve this goal quickly and easily.

Take the case of the Watson family of Van Nuys, Calif., in the central San Fernando Valley. The Watsons were about to start contacting the many lenders operating in the valley as well as throughout the entire Los Angeles area so as to find the best possible loan. First, however, they decided to ask their real-estate broker for advice.

The broker took the Watsons into his firm's computer-conference room where he fed the basic facts and requirements into a computer, such as the amount of loan required, property description, type of loan, etc.

Within seconds, the computer printed out all the terms of the three currently available home loans which were most desirable for the Watsons. It was the best offerings from most of the major home-mortgage lenders in that entire marketing area.

Instead of spending a week visiting with loan officers in more than 50 lending institutions, the Watsons had detailed information on the best possible loans to meet their needs in one brief office session.

The unique computerized information service is provided by the San Fernando Valley Board of Realtors, the largest such board in the country.

Known as the Financial Access Program, this innovative service, launched in mid-January, already has received strong response from both home buyers and lenders, according to Robert Adamson, executive vice-president of the San Fernando Valley Board of Realtors. Its success is expected to spark similar information programs in other marketing areas from coast to coast.

Basically, the program works this way:

The home-mortgage lenders in the area - savings-and-loan associations, banks, and mortgage bankers - provide detailed information to the board of Realtors on the kinds of loans they offer. This can be revised and updated on a daily basis by telephone.

The information is then fed into the computer system by board personnel. It can be accessed by board members (brokers and sales persons) through on-line computer terminals in nearly 500 real-estate offices located throughout the San Fernando Valley.

When a home buyers needs a certain type of mortgage loan, his broker feeds that information into the computer. The computer quickly responds with a printout of terms available on the most favorable loan(s) meeting the home buyer's needs.

''The initial response we are receiving from our members and lenders is stronger than we expected,'' Mr. Adamson asserts. ''It's obviously serving an important need of home buyers and sellers and tends to bring interest rates down to a more competitive and reasonable level.''

The idea for the new information service was conceived during a board meeting which was organized to discuss ways to create a more positive relationship between Realtors and mortgage lenders. That relationship had deteriorated during the heated controversy over the enforcement of ''due on sale'' clauses in home-mortgage notes.

With the implementation of the computerized Financial Access Program, the brokers and lenders are suddenly co-producers of a new and much-needed consumer service.

It's the right time for the computer to come to the rescue of home buyers as it skims through and sorts out all the complex data and delivers just the required facts. Adamson, executive head of the 7,000-member San Fernando Valley Board of Realtors, says the only problem encountered so far in the fledgling program is establishing a uniform and workable set of parameters for use in searching for loans.

''Since lenders have been generally deregulated, the variety of available mortgage loans is tremendous,'' he points out.

There are no technical problems, Adamson adds. It's just a matter of defining the loans in a way that will best facilitate a computer search.

The new service is tapped in to the board's regular computer on-line network whereby individual Realtors can access property information from their multiple listing service through their office computer terminals. This is a basic service offered by most major real-estate boards throughout the country.

The new concept of programming additional information services into that basic computer system will probably become a significant trend in the near future. It meets an important consumer need in an increasingly complex real-estate market.

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