Todays Mortgage Market

by Peter White

Normal High Street Type Lending - Even though the current crisis stemmed from sub prime mortgages criteria and products have changed dramatic lay in this sector as well, borrowers will find it much harder to get certain type of products that they were once used to obtaining.

Gone are the days of 100% mortgages the minimum deposit that is in reality available is at least 10% though many lenders will start at 15% deposit and if its a flat that is the property in question then 25% deposit is much more realistic, also in the past lenders may have fast tracked an application which means if your credit score was high they may not have asked for proof of income however this lending is now much harder to come by. Borrowers will also face much tighter restrictions on the income multipliers lenders will use as once five times a salary could be used to obtain high levels of borrowing this has now severely decreased.

Sub Prime Lending (Poor Credit Mortgages) - This type of lending is quite simply practically non-existent with the lenders (those who are left in the market) restricting their products to match only a few applicants, this of course is very bad news for sub prime clients coming to an end of their current deals as they have very little choice other than to go on the lenders standard variable rate.

Self Certification Mortgages (No Proof of Income Mortgages) - Again this market sector has suffered with criteria being severely restricted both with deposit required and overall suitability, once there were available to those with poor credit and employed applicants however neither of these type of applicants will now be accepted on this type of lending.

But to let Mortgages - Yet again an overall tightening on lending criteria sub prime borrowers are no longer welcome with the 'good old days' of only 10% deposit long gone these days the minimum deposit is 25%. In the past the main basis of the lending decision was on the rental income to be received however now the main income of the applicant is also likely to be taken into consideration when considering any application. Lenders in the past were mainly concerned with the amount of lending they had with a particular borrower but now they will be very wary of any borrower with a large buy to let portfolio as in these days of falling house prices they need to limit their risk exposure.

Self Build Mortgages - Self Build Mortgages have also suffered as a result of this current situation whilst they rarely tended to deal with those with poor credit there were a few self cert deals available but now there are just a few remaining, it is also virtually impossible to obtain a mortgage with no redemption penalty which was very useful as when the new build property was finished you could have then remortgaged to amore traditional mortgage.

In short because of todays turbulent markets you would always be best advised to seek the professional advice of a whole of market mortgage broker to guide you through the pitfalls of todays volatile markets.

http://www.ownbuild.co.uk/buy-to-let-mortgages.htm

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.

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

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.