Tag Archives: mortgage broker

Mortgage Companies – Prime Lenders Versus Sub Prime Lenders

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For the best rates and fees, look to a prime lender to give you top financing due to your excellent credit score. For those with poor credit, turn to a sub prime lender for reasonable rates on mortgage loans. You will also find more flexibility with a sub prime in drawing up terms and conditions in your loan contract.

When Prime Lenders Are Best

If you have an excellent credit score and a solid financial base, look to a prime lender to get you the market rates and fees. With near perfect payment history and cash assets, you can bank on getting superb rates.

To get even lower rates, do some comparison shopping online. Working with a mortgage broker can save you time in your search. You can also negotiate further rate reductions by paying points at closing.

But if you are looking at a down payment of 20% or less, you will need to carry private mortgage insurance. Annual premiums cost around a thousand or more. Once your assessed equity value equals 20%, you can then drop the insurance.

Special Cases For Sub Prime Lenders

Sub prime lenders handle financing for special cases, whether that is bad credit or unique terms. For accepting mortgage applications with higher risk levels, sub prime companies charge slightly higher rates.

Of course there are shady lenders who charge excessively high rates and fees. But you can avoid these companies by researching several lenders to find a good deal on a home loan.

Sub prime lenders dont require private mortgage insurance or a stellar credit past. Nearly everyone can qualify for financing; its just a matter of what rates and fees you are willing to pay.

Where To Find Your Lender

Nearly all lenders handle quotes and applications online. If you are unsure about which type of lender to turn to, take a look at your credit report. If you are still undecided, ask for loan estimates from both types of lenders.

Even within each type of lender, there is a lot of variation in loan costs based on the terms you select. So consider all your loan options when comparing rates and fees.

Mortgage Factors – Loan to Value

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When applying for a home loan, there are a number of factors you have to take into account. Loan to value is one of the key issues that will determine whether you get that loan.

Mortgage Factors: Loan to Value

When considering an application for a mortgage, lenders look at a number of factors. Regardless of the type of loan, they always look at loan to value ratios. The loan to value ration is simply a calculation that tells the lender and you the value of the property in question versus the amount of the loan. The ratio is determined by dividing the appraised value of the home by the amount sought for the home loan. For instance, assume a home is appraised at $200,000. If you apply for a $160,000 home loan, the loan to value is 80 percent.

In evaluating any loan of any type, lenders try to evaluate the risk factor. By risk, they are trying to ascertain the chance you will default on the loan and leave them holding the property. The loan to value ration is one of the factors used to determine risk. Simply put, the larger the loan to value ratio, the more risk the lender has of getting stuck with the property. The higher the risk level, the more picky the lender is going to be about other factors in the application process such as income, credit and so on.

The magic number with loan to value rations is 80 percent. If you can come up with sufficient cash to put down 20 percent on a property, the lender will consider the loan to be less risky. Put in practical terms, the lender knows you arent about to walk away from your large cash down payment if you can help it. Thus, there is less risk in granting the loan.

If you are applying for a mortgage with a high loan to value ratio, you need to make sure you have excellent credit and a strong history of employment. An application with 90 or 100 percent loan to value is going to make a lender risk sensitive, so you can expect it to be much harder to get the loan.

In the current home financing market, the loan to value ratio is not as critical as it used to be. There are now a bevy of lenders that specialize in particular types of loans, particularly high loan to value ratio mortgages. If you are looking at a high loan to value ratio, a mortgage broker is your best option to finding the best deal.

Mortgage After Bankruptcy – Helpful steps

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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.

Mortgage Broker – Training Tips

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If you want to be a successful mortgage broker there are a few things that you can do to increase your chances. There are thousands of mortgage brokers across the world, and to set yourself apart you are going to have to be the best at what you do; there is no two ways about it.

Here are seven mortgage broker training tips that you can follow if you want to be the best in the industry.

1. You do not need to use hundreds of lenders in order to be a successful mortgage broker. Many mortgage brokers think that the more lenders they work with, the more money they will make. By getting five reliable lenders on your side, you will be able to do all of the business that you could hope for.

2. Make sure that you know your lenders rules and guidelines for loans. After all, if you are going to be selling their loans, you need to know everything about them. Many people make the mistake of skimping in this area. Do not let this happen to you.

3. Stay in touch with your lenders, underwriters, and anybody else that is integral to the loan process. By doing this they will be more inclined to stick with you through the thick and the thin. You can stay in touch via mailers, brief calls, or gifts during the holiday season.

4. Determine what your market is, and how you are going to define it. In other words, know what you sell and stick to it. This includes the loans that you are trying to sell to borrowers, as well as what type of people you will work with. Some mortgage brokers only work with borrowers that meet a certain credit score requirement. This is not a bad idea as long as you are consistent.

5. Try to carve out a niche for yourself. By doing this you will have much less competition to go up against. One example would be specializing in foreclosure loans. Sure, you are going to have competition, but it will not be nearly as fierce.

6. When you are communicating with borrowers and lenders make sure that you are professional at all times. This process can be hard on everybody; but a good mortgage broker can make things seem much easier.

7. Ask people that you know in the industry if they can help you garner new business. This way you will have a marketing technique working for you. This is one of the most overlooked but effective mortgage broker training tips.

Overall, these are only some of the mortgage broker training tips that you should consider. In order to be more successful come up with a list of your own tips to follow.

Mortgage Brokers

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When applying for a home loan, it can be difficult to ascertain your options and the best deal out there. Mortgage brokers can help you shop for the best loan for your situation.

Mortgage Brokers

A mortgage broker is an independent professional assisting homebuyers with their mortgage needs. Instead of a loan officer for a bank, a mortgage broker typically works with tens or even hundreds of lenders. This independence lets mortgage brokers hunt for loans that fit the credit history and particular lending needs of a person.

Lets assume you have less than stellar credit when you apply for a loan at ABC Lender. The lender pulls your credit report and determines you dont qualify for any of the loans offered by the lender. The lender is going to drop you like a rock and move onto the next potential borrower.

Now, lets make the same assumption regarding your credit score, but put a mortgage broker in the place of a lender. The mortgage broker is going to look at your credit score, income and overall borrowing circumstance. The broker is then going to give you options and a recommendation regarding the best loan for you. Instead of hoping to get financing, you are now in a situation where you are evaluating the best financing options.

Mortgage brokers can help anyone, but are particularly valuable in two circumstances. The two circumstances are bad credit and document overload.

If you have bad credit, even horrible credit, a mortgage broker is going to be able to hunt down loan options. Many people make the mistake of believing bad credit precludes them from getting a loan. It doesnt. The loan terms may require more points or a higher interest rate, but bad credit doesnt preclude home ownership.

For some borrowers, the monstrous amount of paperwork required in the loan process can be overwhelming. When you use a mortgage broker, the documentation is all taken over by the broker and his staff. In fact, mortgage brokers have people known as processors on their staff who do nothing but compile, organize and process all the documentation needed for loans. The do this everyday and are masters of the process.

The decision to use a mortgage broker is often a good one. A good broker is going to help you get the best loan while making the actual loan process a lot easier than going it alone.

Mortgage Brokers Best Service Tips

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Most of us have been there before, looking to buy a new home. Can you picture the situation now? You see a photo in the estate agents window, and you nip in for a schedule. As soon as the agents know youre looking to buy a property, they will offer to set up a meeting with their mortgage broker / advisor.

You feel like you are being railroaded into using their services, you now believe that these mortgage advisors are the best in the business. The mortgage deals elsewhere arent worth the paper that they have been written on and if you go anywhere else for your mortgage then you will be filing for bankruptcy within 3 months. Does it seem familiar?

While it can be an excellent idea to take on the services of a mortgage advisor, its by no means compulsory. Advisors will either charge a fee in which case they should be offering you totally impartial advice or they will be on commission. This does mean they are likely to try and steer you towards certain products in the interest of earning a bonus.

A mortgage broker is an intermediary who will help you to find the best mortgage deal for your needs and circumstances. Those who subscribe to the Mortgage Code are bound to disclose information about the services they are providing, including:

Whether they are independent, or tied to a particular organisation
What commissions, if any, they will receive
What level of service and advice they can provide

You can request a list of local independent mortgage brokers from The Mortgage Code Register of Intermediaries check www.cml.org.uk for details. Independent Financial Advisors can also act as intermediaries some specialise in mortgages. Make sure to find out whether your broker charges a fee before you agree to use them, and how much it will cost. Normally they should only charge you once you have found a mortgage and had your application accepted.

Using a broker can make the process of finding and choosing a mortgage much easier you give them information about what you are looking for and your finances, and they can do the hard work. Because brokers have experience of the field and a good awareness of current market trends, they can often give good advice to borrowers. They also will have access to a vast range of products that you may struggle to find yourself mortgages from the smaller providers, for example, may not be prominently advertised.

Independent brokers earn money by selling you products they may suggest additional insurance policies for example. You are not required to take up these offers, and be aware that the broker is receiving commissions for selling you policies. However, if you are looking for extra insurance for example repayment protection to cover your mortgage payments it may be easiest to let the broker find you a policy at the same time as your mortgage.

Mortgage Brokers The Nuts and Bolts

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Using a mortgage broker to shop for home loans can make the borrowing process a lot less stressful than doing it yourself. Here are the nuts and bolts on getting a good broker.

Competent Mortgage Brokers

There are a couple of obvious situations where going with a mortgage broker makes perfect sense. If you have less than perfect credit, a mortgage broker is going to be able to open your eyes to numerous loan options a traditional bank would never tell you about. If the idea of handling the mass of paperwork involved in the loan application scares you, a mortgage broker is definitely going to be a savior since they will take on that burden. Still, how do you know if you are talking to a competent broker?

The first issue to address when considering whether to use a mortgage broker is scope. Scope refers to the number of different lenders the mortgage broker works with in home financing. Generally speaking, the more lenders the broker works with, the better mortgage options you will get and, ultimately, the better financing. A good mortgage broker should have at least eight different lenders they work with and be able to go find others should your particular situation call for a special financing package. If the broker identifies only two or three lenders, you need to move on to the next broker.

The second biggest issue is the mortgage brokers knowledge of the lending industry. By knowledge of the industry, the broker should be able to identify multiple lending programs and the various lenders and options for each. For instance, you might ask the broker who he works with and the loan options available for a person with a 580 [poor] credit score. Further, ask the broker if he has arranged funding for such loans before and the specifics of the loans used. If the broker shows a depth of knowledge and starts rattling on about options, youve found the correct broker. If they dont, you havent.

Broker Fees

Mortgage brokers are paid upon performance. If they dont get you a loan, they dont get paid. The positive aspect of this is you can be the mortgage broker is going to bust their tail coming up with a solution for your problem. The negative aspect is you need to make a determination as to whether the options give to you are good loans for your situation. The commission of a mortgage broker is typically paid out of the loan proceeds, but costs such as appraisals are your responsibility. The broker should have no problem telling you their commission rate on the loan.

If you dont trust banks to give you the best deal or have been turned down by a lender, mortgage brokers are a great way to find good deals. Understand the nuts and bolts of what they do and you are on your way to getting a loan.

Mortgage Brokers What Are They?

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A mortgage broker is an individual which acts as a middle man between lenders and borrowers. A skilled mortgage broker can look at a variety of different loans to find one which suits the needs of the borrowers. Once they have found a mortgage which meets the needs of their clients, they are then paid a fee which is a percentage of the money loaned.

What Is A Mortgage Brokers Purpose?

If you don’t have the time to look for a good mortgage, a mortgage broker can assist you. Looking for a good mortgage requires you to contact a variety of different lenders and compare the interest rates on different loans. You will also need to know about the different fees and closing costs which will be included with the mortgage. This can be tedious and time consuming, especially if you are a very busy person. A mortgage broker should be able to perform all of these tasks, saving you a lot of time.

Poor Credit? A Mortgage Broker May Help!

If you have a less than perfect credit history you may have trouble locating a mortgage at competitive interest rates. Using a mortgage broker in this situation may allow you to find better deals than you would find on your own. Many banks aren’t flexible with down payments, and a mortgage broker can find companies and negotiate a down payment which is much lower than you would find at many banks. If you don’t like negotiating deals, mortgage brokers may be an excellent choice for you.

Speculate To Accumulate

While using a mortgage broker may sound expensive, it is often a lot cheaper than the price you would pay to use the services of the lender in locating a good mortgage. If you are able to get a lower interest rate by using a broker, this is more money you will save. At the same time, you can run into problems if you use the wrong broker. Below are some things to look at when choosing which mortgage broker you want to use.

Shopping Around For The Best Deal

You should first talk to multiple brokers to compare their services and fees. You should also ask them for references. A mortgage is a serious part of your financial picture, and you can’t afford using brokers which will not give you the best service possible. All of the fees charged by the broker should be explained up front. In fact, you will want to make sure they are put in writing. The price a broker charges will typically be between the retail and wholesale price of the mortgage.

Many brokers will mark up the price of their services. You should look at multiple brokers to make sure the prices are comparable. If one broker has a much higher price than another, this typically means they are marking up their prices to get the highest commission possible. It is also important to make sure you read the agreement carefully. Ask about any terms you don’t understand.

Reading The Small Print

You should also make sure all the information on your application is accurate. Make sure the broker doesn’t add information which is inaccurate or false. Once you have found a service you’re interested in, go back to your bank or other lending institutions to see if they are willing to beat the price. You should also only borrow the money you need and keep a close watch on interest rates.

If the mortgage broker charges you for locking in a certain interest rate, make sure you get a copy which shows information from the lender. Mortgage lenders have been known to keep the fees they charge for locking in interest rates. You should also make sure the loan you get is the one which was promised.

Mortgage Brokers vs. Banks

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When it comes to searching for the right kind of mortgage to meet your needs, you will probably come across a decision about who you should borrow from: Do mortgage brokers or banks make better lenders?

A mortgage broker is a mediator that facilitates the process of acquiring a mortgage for individuals as well as businesses. Essentially, they are like home loan supermarkets. Their broad access to lenders as well as their wide offering of various programs makes them a convenient source of help for many borrowers. If you have less-than-perfect credit or are in unusual circumstances, mortgage brokers can still find you the type of funding you need. Mortgage brokers will charge a brokers fee, which you should ask about and take into account when calculating your initial payments.

Mortgage brokers will typically originate, process, and pass the loan on to a lender who will subsequently sell it to an investor. They take commission and will have higher closing fees. Beware of gouging, as brokers have full discretion on how much they want to charge the borrower for processing the documents necessary for the loan.

Today, about 20,000 mortgage brokerage operations account for more than 80% of mortgages are issued by mortgage brokers in the U.S. The convenience and resources they offer to borrowers is the key to their popularity.

The term mortgage banker refers either to an individual loan officer who works at a bank or to the bank itself. They specialize in originating mortgages and selling them to investors and continue to service them. Both the origination and servicing processes require fees, which are the two primary sources of income for mortgage banks.

A key difference between mortgage banks and mortgage brokers is that banks have more of a standardized and set approach to setting fees. Bankers are told what fees to charge and are told not to stray away from them. This allows for more stability and prevents the borrower from being surprised when it comes to discovering what the fees for the home loan will be.

Now the question is which is the better option? The answer is quite simple: Whoever gets you the better deal. It should be noted that while some borrowers enjoy the comfort and help of having a mortgage banker see them through the life of their loan (though not all do), while others do not mind either way. This discernment, along with a thorough comparison of deals that you can get from mortgage brokers and bankers, should give you a fairly clear idea of which path to take.

Mortgage Predatory Lending And How To Avoid It

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There has been a lot of talk lately about predatory lending in the mortgage industry, but not much talk about what it is. Predatory lending covers a lot of area and some of the practices that are used in it are somewhat difficult to understand for the average consumer. Here are a few aspects of predatory mortgage lending that might be of interest.

The first thing consumers should understand is that predatory lending does not begin and end with the lenders themselves. It is true that there are several lenders who are guilty of bad loan practices, but there are others just as guilty. These include appraisers, mortgage brokers, home builders, and home improvement contractors to name a few.

Some of the things that you want to watch out for when you are considering a home purchase include:

Always think twice before working with someone who will sell properties for much more than they are worth by using false appraisals that inflate the value of the home.

Never work with anyone who wants you to lie about your income, expenses, or job history. They may also want you to lie about the amount of cash that you have on hand.

Stay away from lenders who encourage you to borrow more money than you know you can repay. This is one of the fastest ways to foreclosure known.

Some predatory lenders will charge high interest rates to home buyers based solely on their race or national origin. The black community is especially hard hit with this one.

There are also some lenders and other professionals who will charge high fees that are not normally a part of the home buying process. If someone asks you to pay a fee for a product or a service make sure you understand what it is you are paying for.

Be very careful when working with anyone who tries to pressure you into taking a home loan that contains high-risk factors. These include things such as balloon loans, interest only payments, and steep pre-payment penalties.

The elderly seem especially vulnerable to those predators who use high-pressure sales tactics to sell home improvement projects or work and then finance them at very high interest rates.

Lending predators are good at their work. If they were not, there would not be such a problem with them. Some of the cons they use to pull people in include such things as telling a home buyer that they, and only they, are the only ones who will finance the home. They may also try to convince you that the home you are looking at is worth much more than surrounding homes even though there is no physical proof that it is. Many of these folks want home buyers to sign contracts or other documents that have blank spaces. Home buyers should never sign these types of documents.

Another crafty tactic is to hand over a higher than expected bill at closing. They understand that after all you have been through to get to this final stage you are more likely to pay the added charges. Do not pay them unless it is proven that they are legitimate charges.

The best advice is to be careful and to be wary. Take your time and do not allow lenders or others to pressure you or to push you into a contract that you do not fully understand.