Texas Mortgage Brokers, Mortgage Lenders & Banks: Which Will You Prefer?

Knowing The Role Of Mortgage Brokers, Mortgage Lenders & Banks For Owning A Home In Texas

If you have been looking for a mortgage company then you will have noticed that there are large mortgage companies and banks, and also mortgage brokers. So is there actually a significant difference between them?

What are the pros and cons involved in using a mortgage broker versus going through a bank?

In this article, we will be explaining all of the major differences between Mortgage Brokers and Banks, along with the pros and cons of each so that you can make an informed decision on which is the best option for you and your situation.

What Is A Mortgage Broker?

This professional is an individual who acts as the middle man between the mortgage lender and the homeowner. A broker is able to prepare your financial documents, loan applications and provide you with mortgage pre-approvals just like lenders are able to do.

A mortgage broker will work with several different banks and mortgage lenders and submit your loan files to these financial institutions for them to issue you a loan. The broker’s commission is paid by the lenders for completing your documents and mortgage application.

How Do Direct Lenders & Banks Work?

A direct mortgage lender or Bank is the company that is funding the loan. The loan officer is the person you will be working with and they work for the Bank. Banks are usually licensed in all or most of the 50 states.

Who Can Provide You With A Better Deal, A Mortgage Broker Or A Mortgage Company?

There are important things to take into consideration when choosing whether you want to work with a Bank/Lender or a mortgage broker. Although it might seem like working with a mortgage broker will save you money due to the fact that they have access to numerous lenders and programs, that is actually not always true.

The mortgage company pays the broker’s commission and some lenders pay higher commissions than others. In some cases that can generate a conflict of interest.

One lender might pay a small commission but offer the best deal. Another loan company might pay brokers a higher commission but be more expensive for borrowers.

Which Lender Is The Broker More Likely To Choose?

When you work with a Bank, your loan officer will only have access to the mortgage rates and mortgage programs that their Bank offers. You could potentially get a better deal from a different Bank.

Just be sure to shop around at all times, whether you are working with a Bank or a mortgage broker. You always should speak to at least two lenders or brokers and compare their loan offers. That way you can ensure that you really are receiving the best deal on a home loan.

That is how you save money on your mortgage.

How To Shop For A Mortgage

When you are shopping around for a mortgage loan it is a good idea to talk to both direct lenders and brokers. Mortgage brokers do have access to many different loan programs and hundreds of lenders.

They can shop for interest rates on your behalf and help you with comparing different terms like 15-year and 30-year terms, adjustable-rate mortgages vs. fixed-rate mortgages, and provide you with advice on other things so that a loan can be tailored that is ideal for you.

Using a broker instead of a direct lender can be advantageous if you have imperfect credit since there will be more programs available that you might qualify for.

Pros & Cons Of Both

Advantages of Working with A Mortgage Broker:

Working with an independent mortgage broker does have several advantages associated with it compared to going through a mortgage banker or bank. Brokers have the ability to submit your loan application to several different lenders. That can make them a very attractive option, particularly for borrowers who have a hard time getting a loan due to issues having to do with their income or low credit scores.

In these situations, there are several lenders that the broker has access to that might have programs with lower requirements. That can save you money and time in having to apply with multiple lenders in order to find one that will provide you with a loan.

  • Access to multiple lenders for finding the lowest fees and rates
  • Usually more knowledgeable
  • More options available for individuals with bad credit
  • A majority of brokers work for or own a small company which can make it easier to get in touch with them than a loan officer who works for a large bank or lender.
  • If the mortgage broker is located nearby, then you can meet with them in person

Disadvantages of Working With a Mortgage Broker:

There are some drawbacks as well to working with a mortgage broker instead of with a direct lender. The broker, in some cases, might charge a higher origination fee. They are not actual lenders, so it might take longer to get your loan processed sometimes when you go through a mortgage broker.

Independent mortgage brokers often do not have an in-house underwriter that they have direct communication with, so they will need to submit your loan application to the lending institution’s underwriter. That can delay closing since it causes additional overlays.

They charge higher fees sometimes.

You might not get the best deal (they could have a preference for lenders that pay the highest commissions)

Delays In Closing

Advantages of working with Direct Lenders and Banks:

When you work with an actual lender instead of a middleman you will be able to avoid some of the fees you would need to pay to a mortgage broker. Your loan officer will get paid a commission when they close your loan.

On the other hand, mortgage brokers might not be that interested in finding the best deal for you, and instead, choose to work with the lenders that pay the highest commissions.

  • Loans might not have as many overlays since it is a completely internal process
  • If you use a Local Bank you might know the banker already who is processing your loan, which allows you to speak to the lender directly without having a middle man.
  • A conflict of interest is not created by the commission that is paid
  • You can save on fees that are charged by a broker

Disadvantages of Working with a Direct Lender or Bank:

Directly working with a lender does have some disadvantages. The loan programs with a Bank tend to be more rigid and come with higher requirements. If your credit score is low many local lenders and banks might not be able to assist you unless you have a 620 credit score at least.

Since the loan agent will not have multiple companies that can be compared, you cannot be sure you are receiving the best interest rate on your mortgage.

  • Fewer mortgage options
  • Sometimes the loan officer might be inexperienced
  •  You might not get the lowest rate
  •  Requirements are less flexible

To speak with one of our experienced mortgage professionals directly, just call us anytime or use any of the interactive tools that we provide throughout our website. We look forward to meeting and working with you.

If you have any questions, please feel free to contact us today!

A Great Suggestion By The Pros On Why You Should Buy A House In Texas

Reasons Why You Should Buy A Texas Home

Owning a home is an investment, however, it actually is not. Home-ownership is an essential wealth-building tool, apart from the fact that it can be financial suicide. Historically, owning a house outpaced stocks, but they actually do not.

Rent Or Buy: Which Is Better?

Home-ownership in the past was an affordable, accessible option. However, the recent financial crisis saw the value of homes drop dramatically, with home prices reaching astronomical levels now due to a shortage in housing, things have changed dramatically over the last ten years. Finding affordable housing can result in increased commute times and having to move away from jobs, which explains the increase in “super commuters” all across the United States.

Is it still worth it to own a home? The answer varies depending on whom you ask, the inputs that are included in the financial model, and one’s general investment philosophy – so that answer is “it depends” most of the time.

There are numerous online tools that are available to assist you in assessing whether or not your current financial situation would result in monthly mortgage payments that are lower than your current monthly rent. However, there are many other factors that need to be considered before you make what will probably be the biggest purchase you ever make in your life. We have attempted to simplify the arguments for reasons why you should and should not buy a house. If you are a longtime renter who struggles to wrap your head around the question, the following are two opposing perspectives on the great home-ownership debate.

Why Should You Buy A House?

There are many financial advisers and academics, equipped with economic models and spreadsheet, who are very happy to show off their fiscal wisdom and arriving at the following conclusion: in terms of dollars and cents, it doesn’t add up to own a house. However, when trying to determine whether to buy a house or not, you need to consider qualitative factors as well as quantitative ones. Ultimately, you need someplace to live.

1. The Shelter Is One Of Our Basic Human Needs

Frequently the benefits over home-ownership are discussed on the basis of return on investment. However, that is not the best way to think about this issue. One of our most important human needs is shelter. It will not make financial sense for everybody in every location to buy a house, but for many people, it will. If it does for you, the reason you should buy a house is due to needing shelter.

Anybody who has been following current events over the past two years most likely has an increased awareness of just how fragile our organizing principles and institutions are that provide us with a certain degree of societal stability for debating home-ownership from the perspective of an investment rather than a basic need. If any massive shift were to occur in our government or political alliances, personally, I would much rather own the house I lived in than be subject to the wishes and needs of a landlord. That might sound a bit paranoid, but do you want to find out whether or not it is paranoid thinking when you currently have the option to purchase a house?

2. It Isn’t An Investment, But It Is Also Not Financial Suicide

Fact: You shouldn’t purchase a home thinking that you are going to get rich off of the appreciation of its value or believing it will pay for itself ultimately. That might be true in some markets. However, it is better to not view owning a home as an investment asset such as bonds and stock, but more as the four walls or more where you live.

However, if you do your research to ensure this is the right time for you to purchase a home financially, professionally, and personally, then it won’t be a bad investment for you, no matter where you happen to live. That is due to the fact that the underlying supply and demand conditions will, over time, continue to push the value of your home up to at least keep pace with inflation.

Although the supply of houses is being restricted currently by numerous public policy positions and economic factors, the number of people who need shelter will continue to increase (unless, of course, a catastrophe strikes which would make the question of whether you should own a home or not the last thing that you need to worry about).

It is true that it is overly simplistic to state that the prices of houses will always increase, as anybody who has lived through the last 10 years knows. However, the underlying conditions that have resulted in a fairly swift recovery for housing should continue.

3. It Is Easier To Retire As A Homeowner

I’m sure you have noticed that it is pretty expensive to be old, due to healthcare’s skyrocketing costs. When you add in rising housing prices, a social safety net that is increasingly in jeopardy, and the strong likelihood that you will be living on a fixed income and have a lower earnings potential, it is easy to see how not needing to worry about paying rent on a monthly basis could be very beneficial. You will still need to pay insurance, property taxes and other maintenance expenses, but there is a very good chance that it will be less than the amount that you pay in rent.

The detractors of home-ownership often bring up the opportunity cost that is involved in investing in a house. If you assume that stocks outperform house appreciation, and that is a completely reasonable position to take, then you may think you would be better off putting your money into equities and then buying a house with the proceeds when you reach retirement age or use the money to pay your rent with.

You can definitely take that route. However, it is a fairly roundabout way of securing a house when you could simply use the money directly to purchase a home. There are also added risk with the stock market’s higher returns. What will you do if the market is down when you get to retirement age and you don’t have enough money to purchase your house? Or what if your investments end up going bad and you are completely wiped out?

You should seriously consider playing it safe, and simply purchasing a house, and do it before your generation hits retirement age and the housing market is overwhelmed. If you can pay off your house completely, or something close to that, you will always have the option of trading down to a less expensive house and pocketing the difference, which will give you a place to live during your golden years – and have some extra money, also.

Before making a decision, let one of the experts at The Texas Mortgage Pros help you find out exactly what loan is best for you.  Feel free to contact us or call us today!

Acquire A Fabulous House In Houston Texas With The Help Of Texas Mortgage Pros

How Long Does It Take To Buy A Home In Houston Texas?

new Dallas home bought with an FHA mortgage loan moderate incomeAre you planning to purchase a house in Houston, Texas for the very first time? If you are then over the years you might have heard “rumors” about how long it can take to purchase a house.

Some individuals might have told you it is 30 days and others will say it is 60 days. However, in reality, every individual’s experience is solely based on things such as the state of the Real Estate market when it was purchased, real estate demand, and whether or not a buyer could get pre-approved before looking for a house to buy.

How Long Does Buying A House Take?

Say you know the kind of house in Houston Texas you want to purchase all the way down to the specific area, as well as features and amenities inside of the house.

If that is the case, after you have found a house, and have submitted an offer for it, it can take 30 to 60 days from contract to closing.

Why Does The Process Take So Long?

That’s a good question. Every lender has its own process they follow when it comes to the home appraisal process it can take as long as 30 days for the lender to get their appraisal process completed.

While the lender is undergoing through the home appraisal process, as a buyer you can help yourself by hiring a house inspector on your own to have the house checked from the top to the bottom and also you should review the property disclosure statements to ensure there isn’t anything wrong with the house.

If You Are Just Beginning The House Buying Process

If you just getting started with the house purchasing process, then you should take the time at first in order to identify what you are looking for in a house before hiring a Realtor since that will make the job that your agent is to do help you a lot easier.

Once you know what you want in a house, then you should get pre-approved to get a mortgage loan so that you can move forward with purchasing a home without having any questions regarding the financing of the property.

About Us

The Texas Mortgage Pros

The team at Texas Mortgage Pros is comprised of experienced mortgage professionals all across the state of Texas. We are fully committed to providing the highest quality service to all of our clients for all of your mortgage needs. Multiple loans programs from your local area – San Antonio, Tomball, Dallas, Austin, the Woodlands, Spring, and Houston, Texas are combined with the lowest interest rates. Our excellent mortgage professionals have years of experience and will work closely together with you to ensure you get the home loan that is specifically tailored to meet your expectations and specific situation. So whether you are buying your first house, your dream home, consolidating your debt, or refinancing a loan that you currently have, our highly experienced loan officers can assist you with finding the best loan program for you at the lowest possible rate.

The ultimate goal that we have is to create long-lasting relationships with all of our clients so that we can continue providing outstanding service well into the future. Unlike many big national mortgage companies, we will keep all of your information secure and private. We are a trusted name within the lending community that you can rely on.

To speak with any of our experienced mortgage professionals directly, just give us a call or use any of the interactive tools that are located on our website. We look forward to assisting you. Visit our blog for more related articles on how to execute the best SEO in Houston!