Your Mortgage
Before You Do Anything Read These Tips

The Common Denominator for ALL Buyers: Getting Your Mortgage
getting a home mortgage

Every Buyer has different wants — but at the end of the day, they all share a need in common: money. Lots of it. That’s where your mortgage lender comes in. The right lender can save you time, anxiety, and loads of cash. And the right loan officer — the professional who represents the lender — can be a powerful ally when you close on a mortgage. It’s important to choose wisely.

There are four types of mortgage lenders:
retail banks, credit unions, mortgage banks and mortgage brokers:

 

Retail Banks
What they are: These are your Chases and Banks of America, plus your local banks. Retail banks, especially the smaller ones, can sometimes offer lower fees and less-stringent credit requirements. If you have your accounts all in one place, you may want to use that bank or credit union.

Credit Unions
What they are: They’re not-for-profit and customer-owned, so they’re not beholden to shareholders like a bank. Because of that, they typically offer more personal service and lower fees. To apply for a loan, you must be a member of the credit union’s community.

Mortgage Banks
What they are: These banks only offer home loans. Many online lenders like Rocket Mortgage by Quicken Loans, operate as mortgage banks. A mortgage bank will assign you a loan officer, who will receive a commission or bonus from the lender’s gross fees for writing your loan. An online lender is going to offer less hand-holding.

Mortgage Brokers 
What they are: Mortgage brokers are essentially personal home loan shoppers — they act as liaisons between home buyers and mortgage lenders to help people find the lowest rates and the best mortgage terms. They’re able to get home buyers the best mortgage rates because they leverage their existing relationships with lenders — something individual home buyers can’t do. The idea is that they make loan shopping more convenient — and perhaps a bit faster. A mortgage broker can be an individual agent or a group of agents, who act as independent contractors. In exchange for their services, mortgage brokers typically charge a 1% to 2% fee of the loan amount, which is either paid by the borrower or the lender at closing.

It Pays to Shop Around Before You Commit
Over the life of the loan, seemingly subtle differences could add up to tens of thousands of dollars. That money belongs to future you. So before you choose your specific lender…

    • Thoroughly research any retail bank, credit union, mortgage bank, mortgage broker, or online option you’re considering.
      Make sure you’re clear on what they can offer you. About one in five (21%) home buyers said they regret their choice of mortgage lender, according to a recent J.D. Power survey. You’re doing your homework so that won’t be you.
    • Interview lenders.
      You’re aiming for a shortlist of three. (You’ll see why it’s three in a minute.) If you’re thinking about selecting an online lender, make sure you take into account these tips and tricks
    • Don’t be shy about seeking advice.
      Ask your real estate agent for a second opinion. They have experience with reputable lenders, particularly in your city or town. The next step? Finding out whether they will give you a loan.

You Should Seek Out a Lender’s (Pre-)Approval
BE AWARE: There’s a world of difference between being pre-qualified for a loan and being pre-approved. Pre-approval means you’ve got skin in the game. It means you’re a boss. And its proof that you can buy. Pre-approval puts you in a better position when you make an offer. Everyone takes you more seriously. Pre-approval provides evidence to the seller (or seller’s agent) that a trusted financial institution is willing to finance the purchase.

Getting pre-approval early in the process also gives you an edge over other buyers.
With a pre-approval, a lender typically goes deeper and tells you more specifically how big a loan you can get. Caution here: Just because the lender says you can take out a loan for an amount, doesn’t mean you should. Consider your lifestyle and monthly budget to decide on the responsible loan amount for you.

It Makes Good Sense to Get Pre-Approved by at Least Three Lenders
Your Loan Estimate spells out the loan’s terms: including:

  • The interest rate
  • The length of the loan
  • Estimated costs of taxes and insurance
  • How interest rates and payments might change over time
  • Other important financials

You want to know these things because:
IT IS ESSENTIAL TO COMPARE. It is the only way to check your loan options and decide which lender is best for you. By comparing loan estimates, you can effectively size up your loan options. If you need help comparing all of these details, the Consumer Financial Protection Bureau offers a sample Loan Estimate calculator with helpful tips and definitions.


 

Many buyers consider the home financing process complex.
IT IS NOT!

This is article is just introductory information. We have created a systematic, step by step plan so you can end up with the right Mortgage, at the best rate and terms with a minimum of hassle.

CLICK To Download Our
“Step-By-Step Guide To Home Financing”