Friday, 7 February 2020

How To Find The Best Mortgage Lender

Before you go home shopping, you want to make sure that you get all your ducks in a row and ready to go, the first step in that is getting your mortgage loan pre-approval. Let's take a closer look at how to find the best mortgage lender that's right for you. Sometimes people really get this wrong where they're like, ho, I want to go see a house, I want to go look at homes now, and you asked them do you have a financial loan pre-approval yet? Have you chatted with the mortgage loan officer about your loan options? And they say no, well, if you go out and see that home what's going to happen if you fall in love with it?. Well, you need a financial loan pre-approval, you have to have your loan pre-approval to submit the offer to the seller. I hope it makes sense to you, I want to get this right. We're going to talk about how to get the best mortgage lender for you.

1. Your Credit Score Need To Be In Shape

When we're talking about your credit score being in shape there's a lot of stuff out there that you hear in adverts that say, if you have a low credit score, or you have no credit score we can help you out with the mortgage. Well, you need to be very careful and read the fine print, in reality, whenever we're talking about your credit score for a home loan you generally want to have at least a 620 or 640. If you get down to 580, a mortgage lender can assist you at that rate but it's going to be a little bit difficult.

Read What Credit Score You Need To Buy A House

If you're below that 580 marks, it gets even more concerning because there are some ways that some people can assist you but you got to wonder about what those trade-offs are. The best practice here is to simply work on your credit score if you know it's not in good shape right now go ahead and take a look at it read the article below

Read: How to Check Your Credit Score For Free

If your credit score in under 620 or 640 please get to work on it right now.

2. 5 Different Types Or Mortgage Lenders

Know your different mortgage lender types, there are 5 different categories. 

Credit Unions

With credit unions these are generally member-owned for natural institutions that often offer favorable interest rate to the shareholders, the shareholders, in this case, being any member of the credit unions, sometimes you can find some very generous mortgage loan rates, if you're a member of a credit union go review your options with their mortgage loan officer there and see if it's going to be right for you.

Mortgage Bankers

Mortgage bankers generally work for a specific financial institution and they package loans for consideration by the different bank's underwriters. Sometimes when you think of mortgage banks it's almost whenever you see those different type of adverts online, whenever you see maybe three or four different types of mortgage lenders and they're providing their different rates, the different things that they're trying to do then entice you to click on, kinda like what a mortgage banker does where they're trying to shop and find the best rate in terms for you based upon what you're looking for in your home loan.

Correspondent Lenders

Better known as your local mortgage companies, your local loan officers generally people that live in the same city as you're looking to purchase your new home. If there's any hyper-specific type of loans that are available they're going to know them because they're also your neighbor so they're going to be paying attention to any specific city, state, or country loan programs that could be beneficial to you and there will be a great source of information. 

You've probably heard me a lot in different articles that I have written where I share with a local loan officer, the reason being is the very real fact that they do know so much about local loan programs and what could be beneficial to you and also you can sit down, meet on face to face and know that you're just not a number. Local loan officer gives you that opportunity to meet up right there in person and see if they're going to be right for you.

Savings And Loans Banks

Also knows as SNL's can be a little bit hard to find they used to be the bedrock and almost like the gold standard of the home loan across the United States. There are generally much smaller financial institutions and they're much more community-oriented but they are worth seeking out if you know of a savings and loan bank in your area, review your options with them and see if they're going to be best for you.

Mutual Saving Bank

Kind of like a saving loan, a mutual savings bank will offer you more locally-focused and often be very, very competitive with their rate in terms that they provide as well, a mutual savings bank could be a good option. In the case of all 5 of these, what you should do is make sure that you're reviewing all of your home loan options with those specific loan officers at each of those 5 types of financial mortgage lending institutions. A lot of people take out 15-year and 30-year mortgages, so this is something that's going to be with you for quite some time going into the future, it's worth seeking out, it's worth doing some research and it's worth making sure you're getting the best deal for you.

3. Get Your Pre-Approval Before Viewing Homes

It comes as critical importance when you get ready to go to the home shopping mode. I have seen it in practice very, very frequently where people will go out to see a home and that home is just too much home for them whenever they go to get their loan pre-approval. Review the realities of your home loan and how much you can truly get approved for.  Let's take a closer look at some of the things that a mortgage lender is going to be looking at during the loan pre-approval process.

  • Complete An Online Loan Pre-Application
  • Social Security number
  • Banks, Saving, Checking & Investment Account Info
  • Outstanding Debt Obligations (Credit Card Loans, Child Support)
  • 2 Yeard Tax Returns, W2s, 1099s
  • Salary & Employer Information
  • Downpayment Amount (And Source)

On that online loan pre-application, they're going to ask you for your social security numbers for yourself and any other co-borrowers that may be on that note, they're also going to ask you for a bank, savings, checking and investment account information to verify the assets that you have. They are also going to be looking for any type of outstanding debt obligations including credit card, car loan, student loans, other balances which would also include like child support, alimony, anything that you have to pay in are on the hook for it, they're going to ask you for two years of your tax returns, w-2s, 1099s, and it will change a little bit if you're self-employed for the type of documentation they ask for. It but essentially they're going to be looking at your finances for the past two years.

They're also going to want your salary and employer information, the last thing they're going to be looking for is information on how much of a down payment you can make and where are you going to get that money from? Is there going be money that's gifted to you from a family member? They need to know where this money is from.

The easiest way to think about what a true loan pre-approval is, really breaks into a very simple acronym to remember, IACE
  • Income
  • Assets
  • Credit
  • Employment Verification

If a loan officer does not do those 4 things then rest assured that you do not have a true loan pre-approval letter. When everything is ready to go then you can go out in-home shopping and you'll be confident in the decisions that you're making knowing that you can make good on any offer that you wish to.

4. Ask Question And Read The Fine Print

There is no such thing as a stupid question, if you have a question in your mind's eye, speak up and lets them hear it out upfront, let's them answer the questions that are on your mind to make sure that you're making a well-informed decision that's going to be right for you as you get ready to purchase your home.

6 Question That You Can Ask Are;

1. How Do You Communicate With Your Clients?

Do you prefer to communicate via email, text message, phone calls, or in-person? And how quickly will you be responding to any messages that I sent to you? Just on a side note here, a professional should be understanding how you prefer to communicate and you also should be open-minded and they should be open-minded to communicate most effectively when you get into the closing process, however, that's going to be sometimes that is a phone call, sometimes text messages, or email, make sure that you guys establish communication preferences upfront.

2. What Are Your Turnaround Time?

How long are your turnaround times on the pre-approval, appraisal, and the actual closing cycle together? Obviously with their pre-approval how long is it going to take to get pre-approved really is going to depend on your financial and economic health and how quickly you get that loan officer all the documentation that they need that we review earlier. The appraisal well, that's going to happen when you get into the closing process and you want to identify how soon that appraisal will be ordered with that loan officer when you're in contract on your new home.

3. Closing

It depends on where you live in the country, if you're in an attorney state this process could take 45 to 60 days, if you're in a non-attorney state it should probably take somewhere between 30 and 35 days, not saying that this can't happen faster because it absolutely can, it really just depends on the speed and efficiency of the loan officer that you're working within the overall situation. Keep in mind that in general terms, it takes 30 to 35 days to close on your new home. 

4. What Lender Fees Will You Be Responsible For?

Just to give you an idea some of those fees that could be included would be their commission, their loan origination, any points if you chose to buy down your rate or call point, your appraisal cost, your credit report, and any applicable fees associated with your mortgage pre-approval.

5. Will You Waive Any Of These Fees? (Or Roll Them Into The  Mortgage) How Does That Work?

6. What Are The Downpayment Requirements?

Getting clear on this upfront will be massively powerful to you and will cause you to be successful when you get ready to purchase your new home.

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