Brokers or Lenders — Which Do You Want for Your Real Estate Mortgage?

by John Harris

A mortgage is a mortgage is a mortgage. NOT! Not only do mortgages differ between lenders, but they also differ greatly by the lenders, themselves. There are two types of real estate originators — brokers and loan officers.

Brokers generally are self-employed professionals, who work to secure a real estate loan for you. They work through a variety of lenders and earn a fee for the transaction. Most of the mortgage lenders who advertise on the Internet are brokers.

Loan officers are employees of a bank, credit union, or other lending institution, such as a mortgage company. They sell and process mortgages and other loans only for their employers. They are usually local and in a physical location.

There are advantages and disadvantages in using both brokers and loan officers for your real estate purchase, so you need to shop for the one that is right for you and your particular circumstance.

Brokers

The advantages to using a mortgage broker for your real estate purchase are many. Usually, the better deal they get for you, the buyer, the more they are paid on the transaction — a big plus for you. If your local bank, mortgage company, or credit union has refused you a loan, a mortgage broker may be able to find a lender, even if you have bad credit — just expect to pay a higher interest rate. If your real estate is unique or commercial property, using a mortgage broker to secure a loan is at times easier and faster.

One downside of using a mortgage broker is that your mortgage loan will be sold to another lender immediately after closing. Another is that brokers choose to do either non-conforming loans, which are higher risk and usually higher interest rates, or conforming loans. This limits your loan options. Brokers do not have to disclose a “good faith” estimate on what closing costs will be, nor are they regulated by the Fair Credit Act. Additionally, they seldom have a physical office with employees offering you face-to-face customer service, and they generally are in another town or state than where your real estate is located. This means they may not understand the local market in which you purchased your real estate. Important issues may arise from the real estate classifications and terms used by your appraiser, for example.

Loan Officers

Though loan officers offer a variety in the types of loans available, you are limited to only those products offered by one institution. Usually a local institution, the loan officer will be familiar with all local regulations and issues will not arise over lack of knowledge in local market terminology.

Banks and Mortgage Companies

Bank and mortgage company loan officers will give you face-to-face customer services, at least before the closing. Like brokers, banks have the option of selling real estate loans on the secondary market. Some banks sell only low-end mortgages or those that require too much servicing with little return. Some sell the loan but keep the servicing portion, making it appear that your mortgage continues to be owned by the bank or mortgage company. They are required, however, to tell you during the initial paperwork if your mortgage may be sold. I suggest you ask before you ever get to that point, if this is a deal breaker for you.

Bank and mortgage company loan officers are licensed and must meet certain criteria. They have more criteria that you must meet, as well, in order to secure a loan (banks usually require the most). Many real estate buyers are refused mortgage loans by these institutions. Both banks and mortgage companies generally do offer better rates and terms. They also must disclose a good faith estimate on what closing costs will be, and they are regulated and audited under the Fair Credit Act.

Credit Unions

You must be a member of a credit union to apply for a loan with them. Many credit unions do not offer real estate loans. The major advantage of securing a loan from a credit union is that they pass on only actual costs of the loan to you — no broker fees or commissions. They also never sell their loans on the secondary market, they always are local, and give you continuing face-to-face customer service.

What to Do

The time to begin looking for a mortgage lender is before you begin looking at real estate. Ask family and friends for referrals, as well as their experience with the real estate lender. Ask your real estate agent for referrals. Then, contact each prospective lender and ask questions — lots of questions! Compare interest rates, terms, after the closing mortgage sale policies, and what criteria do they require that you meet in order to qualify for a real estate loan.

If you are a residential real estate buyer, consider getting pre-approved for a loan. You will know exactly what you can afford to buy, which usually turns out to be much more than you expect.

Spend as much time shopping for a mortgage lender as you will for your real estate. The deal you get can save or cost you thousands or even millions over the life of the mortgage. Get the best deal possible, as well as the right lender for your real estate purchase.

John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more on San Diego Homes for Sale visit http://www.twtrealestate.com

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Mortgage Loans - Which One Is Right For Me?

by Dave Zwierecki

There seem to literally be thousands of mortgage programs out there so how do I know which one is best for me? Finding the right mortgage program to fit your needs and your financial goals can be difficult to do unless you are working with the 'right' mortgage professional and asking the 'right' questions.

Which mortgage program is right for me? This is a very common question asked by many consumers. There is no one answer fits all type response that can be given. Each and every individual person has their own specific financial situation and their own financial goals and dreams. With the number of mortgage programs out there to choose from being in the hundreds and maybe even the thousands, this can be a difficult decision trying to figure out what is going to be best for you. There are interest only loans, ARM loans, Pay Option ARM loans, balloons, fixed rate loans, extendable balloons, conventional loans, FHA loans, and many, many others to consider. Therefore, so what do I need to think about when choosing a loan program then?

Some of the main factors that you will want to consider when choosing which mortgage loan is right for you are: how long will you live in your home, do you have any children attending college currently or within the next few years, is this a starter home, will you have a pre-payment penalty, are you expecting any new family members to be added to your family, how much do you have in liquid assets, are you self-employed or do you work for someone, how much longer until you plan on retiring, do you have enough money for retirement, do you have many other financial obligations besides a mortgage, do you own any other property, and many, many others. Answering these questions, or at least thinking about them before you are ready to finance a home mortgage loan can help to greatly improve your chances of finding the right mortgage loan to meet your demands.

A fixed rate mortgage is always going to provide the most stability in the long run, however since most Americans sell or refinance every 4.6 years a fixed rate does not always make the most sense. An ARM loan can provide a cheaper payment and a lower interest rate upfront for a certain number of years, but there is a lot more risk involved obtaining an ARM loan because of the uncertainty of what will happen after the fixed rate period expires on the ARM. Interest only loans are good for real estate investors and consumers who need the flexibility of being able to make only the interest portion of the monthly payments. Pay Option ARM loans can be a great way to maximize cash flow, especially for self-employed and commissioned borrowers. However, Pay Option ARM loans can incur negative amortization, which is when your balance increases instead of decreases. There are a lot of items that you need to make sure that you understand before entering into a Pay Option ARM loan. FHA loans are usually better for homebuyers, especially first time who may not have the best credit or the best overall financial situation.

Thus, find a good mortgage professional and keep him or her for the rest of your days. The more you work with one person the more familiar they will be with your situation and be able to understand where you are coming from and where you want to go. This will help to insure that you find the proper mortgage loan for your situation.

Dave Zwierecki is a licensed mortgage professional with First Security Financial Services and has over 10 years of experience in the credit and mortgage lending fields. For more information, or to learn more, please visit: http://www.gofirstsecurity.com or for more information on mortgage loan programs visit: http://www.nomoneydown123.com/Florida/mortgage_programs.htm

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Discover The FOUR Essential Questions You Must Ask While Shopping For A Mortgage

by Ed Bisquera

How can you be sure you’ve got the right mortgage broker as you shop around?

First: make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are 4 simple questions your lender ABSOLUTELY must be able to answer correctly. If they don’t have the answers…RUN…DON’T WALK… RUN…TO A LENDER THAT DOES!

1. What are mortgage interest rates based on?

(The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)

2. What is the next Economic Report or event that could cause interest rate movement?

(A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, visit www.pdxloan.com/economicreport/ and join the weekly distribution list for MMG Weekly – this is a copy of a weekly newsletter on current Economic Reports.)

3. When Bernanke and the Fed “change rates”, what does this mean… and what impact does this have on mortgage interest rates?

(The answer may surprise you. When the Fed makes a move, they can change a rate called the “Fed Funds Rate” or “Discount Rate”. These are both very shortterm rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the fi nancial markets in response to infl ation. For more information and explanation visit Google or research online further).

4. Do you have access to live, real time, mortgage bond quotes?

(If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-dayprice change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!)

Be smart... Ask questions… Get answers!

More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life… but a reputable experienced mortgage broker does this every single day. It’s your home and your future. Choose someone who makes it their profession and passion, ready to work for your best interest.

Once you are satisfied that you are working with a top-quality professional mortgage advisor, you'll want to continue with the 5 rules and secrets you must know to “shop” for a home mortgage loan effectively. Visit http://www.PDXLoan.com for a complete report on the 5 mortgage shopping secrets.

Ed Bisquera has previously worked as an event planner, music producer and marketing consultant. He is a Mortgage Planning Consultant near Portland, Oregon for Mortgage Express, LLC and mangages http://blog.PDXLoan.com and home mortgage loan information site http://www.PDXLoan.com. Articles, interviews and consulting are available at 1-800-862-0784 ext 21.

For more News, Articles, Guides, Tips, Tricks and various Mortgage And Loan Products information... visit our site at http://www.mortgage-and-loan-info.com.

100% Shared Ownership Mortgages

by Joe Kocsis

As UK house prices have escalated out of the reach of the first time buyer many people have had to resort to moving into rented accommodation to get a roof over their heads. An Englishman's home is his castle and with the average UK mortgage now being in excess of £197,000, it is now an extremely expensive commodity and the dream of owning your home is looking bleak for the first time buyer.

The truth is that house prices have outstripped incomes and as a result affordability has become a big, big problem. All is not lost, so, what are the alternatives and how could you become that homeowner?

Let us look at some alternatives that could be considered: -

* Shared ownership
* Parent guarantee schemes
* Buying with friends
* Shared equity schemes

Shared Ownership

If you are unable to buy a property outright on the open market, then shared ownership is the ideal solution for you. Shared Ownership is a part buy, part rent scheme, which enables purchasers to buy a home in stages. Purchasers can buy an initial share between 25% and 75% of the value of the property and pay a subsidised rent on the remaining value of the property. Shared ownership properties can be provided by housing associations, housing trusts and local authorities. These organisations try be as flexible as possible with regards to the initial share purchased, but this may be as much as 50% of the market value at some of their developments.

A service charge will normally be payable to cover the cost of communal maintenance. The service charges payable can remain the same whatever percentage you own of your home and continues to be payable should you purchase your home outright where possible. You will need to have sufficient savings to cover the initial cost of home ownership: legal fees and stamp duty for example. You will need to be able to meet the costs of rent, mortgage, service charges and other associated outgoings.

As your income increases, you can buy further shares of your home until you could own 100% of the value and no longer share the ownership with the housing association or trust. The greater the percentage you own, the lower the percentage on which you pay rent. However, if you do not wish to buy more shares in the property, you do not have to. Obviously, the more you own, the less you pay in rent. And, if you can buy your home outright in the future, then no rent will be payable.

100% Shared Ownership Mortgages

Having found the shared ownership house of your dreams a good whole of market mortgage broker should then be employed to find the best and cheapest mortgage. Careful searches can reveal 100% shared ownership mortgages that will not require a deposit, even if you have an adverse credit history.

Finding the right mortgage is a very important financial decision in life as it is more often than not the largest single expenditure in people's lives! People will often search the supermarkets shelves for bargains choosing products for the sake of a 1p or 2p saving per item and there's nothing wrong with that; I do it all the time.

Our parents teach us to be frugal with money in our up bringing and we sometimes become animals of habit throughout our lives. Through the generations, inflation has seen prices increase ten fold and who would have thought years ago that the price of a loaf would touch the £1 figure.

The same can be said about UK property, as the housing market has exploded and the average mortgage has gone way above the £197,000 figure. This is before we align our currency and interest rate with the euro. Ireland has seen a massive explosion in property prices in the post years of joining the euro and it is now an extremely expensive place to buy property.

Consider this as a normal mathematical comparison. A 2% saving on a £100,000 mortgage works out at £2,000 per year and assuming that this saving can be made every year by remortgaging and moving the mortgage to another lender, it equates to an astronomical £50,000 saving over the normal mortgage term of 25 years. It just doesn't make sense to be putting an extra £40 per week into a lenders pockets when they already make billions of £££'s net profit per year.

Most of us have all experienced hard times at some stage in our lives and received letters from banks telling us that they are going to charge us £27 for bouncing a cheque or non payment of a direct debit or standing order. Now is the time to hit back and take some of that money back from them by taking advantage of the discounts that they have to offer to borrowers.

So, if there is massive saving around like that, why do people not remortgage more often?

Surveys conducted by lenders have identified that some people are just not aware, whilst others have said that they just could not be bothered. Some people have stated that the mortgage market is just too complicated.

Well, the range of UK mortgages has increased dramatically over the past few years. Although this increase in mortgage types has added complexity, it has also introduced fierce competition, which has in turn resulted in the availability of some very attractive mortgage products for the customer. With over 10,000 mortgage products to choose from, how do we ensure that we get the best mortgage and remortgage rates?

Employing the services of a whole of market mortgage broker (the equivalent of a supermarket) can pay dividends here, as they have sophisticated computer software to narrow down the best rates for buying with friends, shared equity schemes, parent guarantee schemes and 100% shared ownership mortgages.

Joe Kocsis has over twenty years of experience in the UK Financial Services Industry. Follow this link http://www.mortgages2.co.uk for further information.

For more News, Articles, Guides, Tips, Tricks and various Mortgage And Loan Products information... visit our site at http://www.mortgage-and-loan-info.com.

Mortgage After Bankruptcy: These Steps Could Help

by R. Lawrence Anderson

If you want to increase your chances of qualifying for a mortgage after bankruptcy, here are some steps you can take:

First, if you plan to apply for a mortgage after bankruptcy, you will want to have any inaccurate or obsolete negative information on your credit reports corrected or removed. This can help increase your credit score.

Also, you will want to establish some new accounts, and pay them in a timely manner over time. If you've paid the accounts on time for about 18-24 months since your bankruptcy, this should help rebuild your credit - which can be a plus when applying for a mortgage after bankruptcy.

Next, you will want to work with an experienced mortgage broker. Why? Because buying a home is probably going to be one of the biggest investments you'll make. You will want to have an experienced professional guiding you through the lending process - especially when it comes to applying for a mortgage after bankruptcy.

A mortgage broker typically has access to dozens of lenders and will probably have a good idea of which ones will (and will not) approve you for a mortgage after bankruptcy. In addition, they will be able to tell you what to expect in terms of the financing process.

So how do you find a mortgage broker? One way is to to ask friends or real estate agents for a referral. Once you have a few names, set up an appointment to interview each mortgage broker.
Among other questions, you will want to know if they have successfully been able to get other individuals a mortgage after bankruptcy. You also want to make sure they are licensed.

Another question you will want to ask is what type mortgage loan (A, B, C, or D) the mortgage broker thinks you can qualify for. Why? The lower the grade of the loan, the higher the interest rate. This is an important consideration when applying for a mortgage after bankruptcy.

In addition, there are other important questions you will want to ask a potential mortgage brokers - ones that could help you save money and/or increase your chances of qualifying for a mortgage after bankruptcy. While there isn't enough room to cover them here, I go into detail on them in After Bankruptcy Credit Solutions.

Also make a point to bring your financial information with you when you meet with a mortgage broker. For example, you should have your income and expenses available as this will help the broker determine the loan amount you may be able to qualify for when it comes to a mortgage after bankruptcy.

Generally speaking, most lenders will allow you to get a home loan with a payment of up to 28% of your gross income. So if you make $4,000 per month, that would be $1,120. But keep in mind that this just an example. Again, a good mortgage broker can explain the criteria that each lender has.

If you have copies of your credit reports from each of the major credit reporting agencies (Experian, Equifax, and Trans Union) this will help also. Your credit report will play a major role when it comes to qualifying for mortgage after bankruptcy.

On that note, if you want to increase your chances of qualifying for a mortgage after bankruptcy, make sure that any inaccurate or obsolete negative information is removed from your credit report. This is important for two reasons: (1) It can mean the difference between qualifying or not qualifying for a mortgage after bankruptcy, and (2) if you end up qualifying for mortgage after bankruptcy, any inaccurate or obsolete negative information on your credit report could cost you up to $1,000s or even $10,000s in additional interest.

How do remove any inaccurate or negative information from your credit report, so you can improve your chances of qualifying for a mortgage after bankruptcy? There are specific steps you need to take. While I cover them in After Bankruptcy Credit Solutions, there is not enough room to go into detail here. Just remember that ideally you want rebuild your credit history before applying for a mortgage after bankruptcy.

By the way if you think that removing inaccurate or negative information from your credit reports takes a long time, I have good news. There is a way to have it removed in as little as 72 hours - the service is typically not available directly to consumers. In After Bankruptcy Credit Solutions I show you how to find this type service if you are trying to qualify for a mortgage after bankruptcy.

In this article we touched on two important steps you can take if you plan on applying for a mortgage after bankruptcy: Correcting or removing any inaccurate or obsolete negative information from your credit reports, and finding a mortgage broker to guide you through the lending process.

Copyright © 2006 Innovative Solutions Publishing, Inc. All rights reserved.

The company and product/service names referenced in this article are the trademarks, registered trademarks or service marks of their respective owners. None of the owners have sponsored or endorsed this article.

DISCLAIMER:

This information is designed to provide only a general overview of the subject matter herein.

This information is provided with the understanding that neither the publisher nor author is engaged in rendering legal, accounting or other professional advice. If legal or other expert assistance is required, the services of a professional should be sought.

Neither the publisher nor author shall be liable for any loss or damages, including but not limited to special, consequential, incidental or other damages, caused by the information contained herein.

R. Lawrence Anderson is the author of After Bankruptcy Credit Solutions which shows individuals how to qualify for credit & loans after bankruptcy. For more information visit: http://www.bankruptcy-credit-solutions.com.

For more News, Articles, Guides, Tips, Tricks and various Mortgage And Loan Products information... visit our site at http://www.mortgage-and-loan-info.com.

Secured vs Unsecured Loans

by Adam Heist

Let’s face it: at some point in your life you will probably have to borrow some money. Whether to finance a new car purchase, pay for your kid’s braces, or buy a new home there are times when you will need to get money from an outside source. If a friend or a family member agrees to lend you the money, then that is good for you. However, most loans are with financial institutions such as a commercial bank, a credit union, or with a mortgage company. Not all loans are the same, but all loans fall into one of two categories: they are either secured or unsecured loans. Keep reading and we’ll compare and contrast these two loan categories.

A secured loan is a loan that is backed by collateral. This means that in exchange for a loan, the lending institution will put a lien on something else that you own. For example, if you want to borrow $5000 for a used car, the lender may require that you put your $6000 stamp collection up as collateral. No, you won’t have to turn the stamp collection over to the lender until the loan is paid off, but you will be expected to turn it over should you default on your payments. A secured loan is considered to be a less risky loan and loan rates are historically much lower than an unsecured loan.

An unsecured loan is a loan that has no collateral to go with it. Essentially, the lender is taking a risk that you will pay back in “good faith” your loan and he is going out on a limb to lend money to you. It could be that your lender sees your excellent credit rating and believes that you are a low risk borrower. Even if you have bad credit, a lender might still be interested in allowing you to borrow money. In this case your interest rate will be very high, perhaps 20% or more depending on your state or province’s restrictions.

Secured loans are usually include mortgages where the home is the security or for a new car where the automobile is the security there. Unsecured loans typically involve most credit cards and some personal loans. Student loans are unsecured loans as well.

Naturally, if you want to save on interest then a secured loan is the way to go. However, if you don’t have the collateral and there is a lender willing to give you the money, then an unsecured loan could be of value to you. Just remember that the highest loan interest rates are always with an unsecured loan.

Adam Heist has helped many internet surfers since launching his website loans company which details many aspects of the Loans industry. Adam also prides himself on over-delivering, why not stop by today and see why.

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10 Easy Steps to Help You Apply For a Balloon Mortgage

by Sarah Miller

Balloon mortgages are short-term loans that act similarly to a fixed-rate mortgage. The first mortgage under it usually has a term of just five to seven years. A fixed-rate mortgage, on the other hand, usually lasts for around 30 years.

In a balloon mortgage, the final payment is always larger than that of the regular payments. After the scheduled term, the remaining balance is due in full. Typically, a balloon mortgage, regardless whether is the first, second, or third, may have a term of anything between one to twenty-five years.

If you wanted to apply for a balloon mortgage, there are certain steps that you have to understand and go through. To guide you with each, read on the following:

1. Inquire from the financial institution offering the mortgage. Treat the balloon mortgage to be the same as any other mortgage. If you are familiar with the steps in applying for a different kind of loan, the balloon mortgage's steps are basically the same thing. You have to secure the same documents and sign the necessary papers.

2. Always know what the interest rate is. In a balloon mortgage, the interest rate is almost always fixed for a certain period. For the most part, it may carry a lower interest for the first few years of the loan. It all depends upon the provider. It is your responsibility to know how much interest you have to pay.

3. Know when the balance becomes due. As stated earlier, in a balloon mortgage, the balance becomes due after a certain period. You pay part of the amount in equal installments for the term specified. When the term is up, you are obliged to pay the entire balance. Knowing when you have to pay for it makes you prepared and enables you to plan ahead.

4. Know if there is an option to refinance when the due date comes. So you won't need to pay the balance in one big sum, ask the loaning institution if they are willing to refinance the amount. This is a good option for people who may not have a large amount of money at once sufficient to cover the balance.

5. Know if there is a possibility to lose the refinance option. Some mortgage companies give out a refinance option to customers but for a set of conditions. They may require mortgagers to be prompt in payment. The refinance option can help a lot. You have to know the guidelines and remember it.

6. Know if you have to qualify for the refinancing loan. Refinancing has become a privilege, and not a right, for people under a balloon mortgage. Some mortgaging intuitions would reassess your ability to pay. Hence, you need to apply for the refinancing loan. The financing institution may require you to pass and sign documents again.

7. Assess your ability to pay. With all of these said, you have to check your financial standing and capability. With the interest rate, the regular payment, and the refinancing option, honestly determine if you can afford a balloon mortgage, or if getting one is feasible. A wrong decision will have big effects on your financial status.

8. Analyze all the possible worst-case scenarios. Before heading on to a balloon mortgage, or any mortgage for that matter, you have to be prepared for the unexpected things. Examples could be losing your job, an income option, or similar situations. The over-all economical condition of the country may need to be analyzed as well.

9. Consult with an impartial expert. Some financing experts and mortgage gurus are more than willing to give solicited advice to people who need it. Some even do it for free. Try to seek the people who can help you the most. And learn from them.

10. File for the loan. After everything was set and the small things are straightened, you should be able to confidently sign the application form and proceed with it. Just make sure that every detail is well taken cared of. That is the most important thing here.

These are the 10 things you should do when applying for a balloon mortgage. Each step is equally important than the others. All of it are listed so that you will be guided accordingly, as well as determine, if a balloon mortgage is right for you or not.

The above article was written by Nicole Steffanson on behalf of a buzzing online Residential Remodeling Contractors community where homeowners easily and painlessly find contractors for all home improvement projects including roofing contractors, concrete contractors, electrical contractors, kitchen and bathroom contractors, painting contractor and many more.

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