Shopping for the Right Mortgage Lender
Owning a home takes a lot of research effort at the owner’s end, especially when it involves taking time to look for the right financing package from a reliable mortgage lender. The best strategy here is to get to know better and understand the operations of different types of mortgage lenders.
Usually, a realtor will suggest a mortgage bank to apply for a mortgage loan as banks like these are known for their financial capacity to lend mortgage at a market value and at a low interest, fixed rate. Mortgage banks are big institutions and this means that there are numerous mortgage applications pending for approval and, therefore, getting your loan approved may take a while. In instances when your loan is not approved, most mortgage banks will allow their loan officers to broke your application to another lending institution.
Another type of mortgage lender is called a portfolio lender or better known as a savings and loans lending institution. While mortgage banks have a more standard loan guidelines, the portfolio lenders are more concentrated on the applicant’s savings history and income capability. While it is easier to get a loan from a portfolio lender, however, the amount of loan approved and its corresponding interest rate may not be as attractively competitive as those coming from mortgage bankers. Just in case your house loan does not pull through in any of the mentioned lenders, there are also institutions that perform as mortgage and savings and loans at the same time.
Oftentimes, the best way to get a house loan fast is through a mortgage broker for a fee as these persons know very well this industry and, with that, they can easily shop for the best rate available from so-called wholesale lenders and they also know a lot of loan officers from the different institutions. The advantages of mortgage brokers are that they know where you can submit for a loan and advise you to apply, either to a portfolio lender or mortgage bank, based on your income and financial status, and, at the same time, if your loan application is disapproved, they can re-package the loan and submit it to another lending institution.
A recent trend, nowadays, is for real estate companies, including builders, to own their own mortgage company, which may be favorable for first-time homeowners but the business arrangements here is rather controlled by the real estate company and, thus, expect greater profit from them. It is in the interest of loan applicants to be cautious into entering any kinds of offers and that it would be good to study each one.