Shopping for the Right Mortgage Lender
If it is your first home purchase, your foremost concern is where to apply for a house loan or which mortgage lender will be suitable to assist your need to purchase a house. Part of your research must concentrate on understanding the various types of mortgage lenders and how they operate.
Mortgage bankers are recognized generally as the ones to approach to for first time home buyers as they have the experience, being their mainstream job to promote mortgage loans especially to housing programs, that are collaborated by the state or local government, sold at the current market rate and at low interest, fixed rate. One of the observations found in mortgage banks is that due to its economic capacity to be able to finance mortgage loans, they are confronted with so many loan applications which take time to be approved as they are strict with the loan requirements. 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 it is much faster to get a mortgage loan from a portfolio lender, however, having a good track record of your savings and income capacity are salient for them to qualify you for a loan. Portfolio lenders offer adjustable rate loans and these are slightly higher than fixed rates, therefore, their offers are not as competitive as mortgage bankers. Take note that there are also lending institutions that function as both mortgage bank and savings and loans at the same time.
Because, in reality, most house loans are not easily obtained, this is where the networking skill and expertise of a mortgage broker company come in, as its job is into regular negotiations between wholesale lenders and loan officers. Mortgage brokers have these advantages: they have the knowledge as to which company you can better apply for a house loan, portfolio lender or mortgage banker, and they know how to put together again your loan in a different strategy and submit it to another lending company.
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. The best advise for house loan applicants is to be more vigilant in understanding the offers provided by these companies and, in this manner, securing a better, reasonable interest rate at lower cost.