6 Steps To Finding A Qualified Mortgage Broker In Texas
Finding the right mortgage broker is important to consolidate your home buying costs over the next few years. Most buyers are not experienced in the home buying process. So they need the service of a mortgage broker who assures exceptional service at affordable rates. Here are 6 important steps to finding a qualified mortgage broker on the market.
1. The Experience Of The Broker
The most important thing to consider when choosing a reliable mortgage broker is their experience in the industry. Make sure you carefully analyze the potential broker and pick one with extensive experience to provide value for your money. Ask the broker about the types of homes or properties they dealt with in the past and for how long they have been in business.
2. The Mode Of Compensation
Consider the mode of compensation for the potential broker when choosing the right candidate for your project. Most brokers will charge you a fee that comprises of the percentage of the loan amount. This will be the same for each loan they sign for your company. Other brokers are compensated via yield premiums. Yield premiums are applicable when the broker finds a higher-yielding mortgage rate for the borrower.
3. Rate Locks
Rate locks are used by some brokers to speculate on the rise and fall of interest rates. If the broker uses rate locks, you should find out as much as possible about the process before you commit to the loan. If you want to prevent the mortgage broker speculating on your investment, make sure you get it in writing.
4. Get References
Getting references from other clients who have used the service in the past is important when choosing the right mortgage broker. The broker should be able to provide at least 2-3 references for their work. Talk to some of the past clients and ask about the level of service and the company’s commitment to providing affordable mortgages before choosing the right mortgage broker.
5. Interview Several Mortgage Brokers
Most homeowners make the mistake of choosing the first mortgage broker they come to contact with. It may save you time but lead to selecting the wrong broker in the process. Don’t forget to speak and interview at least three reputable mortgage brokers in the area before you decide to choose the best broker for the project.
6. The First Official Meeting With The Mortgage Broker
It’s important that you prepare for the first meeting with the mortgage broker. You should carry the important documents required for the mortgage loan. Some of these documents include proof of income, bank statements, credit card statements, and any other documents. This will help you reduce the time it takes to complete the paperwork when applying for the mortgage loan.
If you are looking for a reliable mortgage broker, you are in the right place. With a host of such professionals out there, choosing the right one isn’t easy. The above article provides 6 important steps to finding a qualified mortgage broker on the market. Feel free to contact us or call us today!
10 Important Questions To Ask Your Mortgage Broker Or Lender In Texas Part II
5. What Are All The Costs?
Mortgage lender fees also include third-party vendor fees such as credit reports, appraisals, pest inspection reports, title policy, taxes, recording fees, and escrow where applicable. The loan estimate should include an estimation of all these fees. Federal law requires that the broker or lender gives you a loan estimate when getting a mortgage loan. The lender should deliver the loan estimate when the loan application has been completed.
6. Is It Possible To Get A Loan Rate Lock?
Interest rates can change or fluctuate on a daily basis. If you believe that the interest rates are moving up, you should ask the lender if it’s possible to get the loan rate locked. A lender should charge zero to one point to lock the loan rate. Ask if the lender charges a fee for the service and whether the lock-in protects all the loan costs. Are they giving the loan lock-in writing and for how long will they lock the rate?
7. Are There Any Prepayment Penalties?
Some states don’t allow prepayment penalties. So, you need to ask about this. A prepayment penalty will allow the lender to collect an additional 6 months of unearned interest if you decide to pay off the loan early – ether by selling the property or through a refinance. If your state permits prepayment penalties, make sure you ask the lender how much it is. Get to know about the terms of the prepayment since some are in effect only during the first 2-5 years of the mortgage loan.
8. Will The Lender Approve The Loan In-house?
Make sure you get to know if the lender can handle its own underwriting or it’s assigned out. Underwriters will review the loan and issue certain conditions before rejecting/approving the mortgage. FHA and VA loans would take longer to process. But some lenders will automatically approve or disapprove a loan without sending it to the FHA or VA.
9. How Long Will You Take To Disburse The Loan?
The average time to process a loan is between 21 to 45 days. You should know about the closing date when writing a purchase contract. You should coordinate with the lender to get this date. Ask about the obstacles to closing the loan and how long the final application approval will take.
10. Do You Guarantee On-Time Closings?
Closing the transaction on time is important. Your lender should be able to give you a closing date with committing to the loan. You will have to face problems if the lender can’t disburse the loan on time. Ask about any increases in interest rates if the lock-in expires. What if you have to pay movers to reschedule? You need to ask all this from the lender before committing to the loan.
Contact our expert mortgage professionals, call us today, or use our interactive tools that are on offer on our site. We cant wait to meet you. Click here to go to the first article in this series.
10 Important Questions To Ask Your Mortgage Broker Or Lender In Texas Part I
Are you planning to get a mortgage loan? If so, you need to ask the right questions from the mortgage broker or lender before committing to the loan. You need to know about the type of loan you are getting and whether it’s right for you. Not asking the right questions may lead to many problems after you get the loan. Unanticipated and hidden fees are a big issue with most mortgage loans. That’s why you need to continue to shop for the right mortgage broker or lender until you feel confident about the answers you are getting.
Having a solid relationship with the broker is important to get the best deal in town. You will get better assistance, advice, and accurate information from the broker the more he or she knows you. You shouldn’t hesitate to share your personal information with the broker or lender including permission to run your credit report to build a solid relationship with the broker. Here are 10 questions to ask the broker or lender before committing to the loan.
1. Which Type Of Mortgage Loan Is Best For You?
A good lender will want to know more about you and your goal before placing different loan options in front of you. You wouldn’t want a doctor to suggest surgery before knowing your medical condition and history. Likewise, the broker should gather sufficient information before offering the best type of loan for you. Ask the lender or broker to explain the pros and cons of adjustable-rate loans, fixed-rate loans, negative amortization loans, and interest-only loans. Check out how each option would fit in with your personal situation.
2. What Is The Annual Percentage Rate & Interest Rate?
The annual percentage rate (APR) of a mortgage loan is a complex calculation. It adds the interest rate and other related lender fees and divides the sum by the term of the loan. But all brokers don’t compute the APR correctly. On the other hand, you cannot accurately compute the APR rate for an adjustable loan. The APR won’t account for early payoffs either. Ask the lender about the adjustment frequency if the interest rate is adjustable. Also, don’t forget to ask about the highest rate or cap, the margin, index, and the maximum annual adjustment.
3. How Much Down Payment Is Needed?
The 20% down payment is not always mandatory. For example, if you are well-qualified for the loan, you can get away with a down payment of 3% for some types of loans. But there are pros and cons to a lower down payment. Make sure you ask the lender about all the options you have.
One disadvantage of a low down payment is you will have to pay for private mortgage insurance if you put less than 20% down. You will have to pay an increased monthly payment and more closing costs under such circumstances.
4. What Are The Origination Fees & Discount Points?
Each point will be equal to 1% of the loan amount. For example, two points on a $100,000 mortgage will cost you $2,000. The more points you pay, the lower your interest rate will be. Points are also tax-deductible. Most lenders have origination fees in addition to points. They are also known as lender fees. You should ask about lender fees when you are trying to get information on a lender’s or broker’s policy.
Contact our expert mortgage professionals, call us today, or use our interactive tools that are on offer on our site. We cant wait to meet you. Click here to go to the next article in this series.
Finding the right lender isn’t always easy when searching for a home loan. There are a lot of different kinds of mortgage lenders out there, which can make it difficult to know which option is best. One way to simplify the decision-making process is by learning more about the various types of lenders that are available.
While it is important to search for the best loan terms, it is equally as important to choose the right lender. A good lender simplifies the borrowing process as much as possible, reducing your expenses and helping you get your money quickly. Comparing all of your options is essential. Some of the different types of lenders you may encounter include mortgage brokers, direct lenders, correspondent lenders, retail lenders, and wholesale lenders. Some types of lenders cross over between several of these categories.
The Difference Between Mortgage Brokers & Mortgage Lenders
When researching home loans, you probably have encountered both mortgage lenders and mortgage brokers. It is important to understand the difference between the two. A mortgage lender is a bank or organization that lends money. Before agreeing to give you a loan, lenders require you to meet certain predefined borrowing standards. This includes checking your credit and verifying that you have the financial capacity to pay the loan back. They determine the interest rate, the schedule for repaying the loan, and other terms or conditions of the loan.
A mortgage broker, on the other hand, acts as a go-between, working with both you and the mortgage lender. Brokers don’t have any control over the terms of the loan or the approval process. Their job is to help their clients apply for mortgages. Along with working with their clients to put together the necessary documentation, they also provide advice about credit problems or other financial issues that could negatively impact their chances of getting approved. Mortgage brokers frequently are employed by independent companies, which means that they can compare loans from more than one lender to ensure you are getting the best deal. In most cases, the lender pays the broker once the loan closes. Sometimes, however, the commission is paid by the borrower at closing.
Mortgage brokers have relationships with many types of lenders. As a borrower, you should have a thorough understanding of the various available products. Remember, brokers, don’t work with direct lenders. Consider contacting several direct lenders yourself in addition to working with a mortgage broker. That way, you can be sure you are getting the best possible deal.
How Mortgage Brokers Are Paid For Their Services
Mortgage brokers usually charge a fee for their services that fall somewhere in the range of 1% of the total amount of the loan. Lenders also sometimes charge a similar fee. Depending on the broker, the commission is either paid by the lender or the borrower. If you take out a loan at the par rate, you generally don’t have to pay an origination fee for the loan and the lender will handle paying the broker. Remember, however, that the interest rates charged by mortgage lenders are usually higher. With brokers, you may be able to agree on a flat fee ahead of time. Always find out more about how a particular broker handles their fee before agreeing to work with them.
The Benefits Of Using A Mortgage Broker
Mortgage brokers can compare loans from multiple lenders, making it faster and easier to find a loan that is a good fit. They also are an excellent choice if you have credit blemishes or if you don’t have a very large down payment. Brokers usually maintain relationships with many different lenders, often numbering in the hundreds. Usually, at least some of these lenders are willing to work with borrowers who have unique challenges. Brokers generally go above and beyond to help their clients find a loan since they only earn a commission if the loan actually closes.
The Downside To Using A Mortgage Broker
After the broker connects you with a lender, the rest of the process is out of their hands. The lender controls everything from processing the loan to determining whether or not you are approved. If the closing is delayed, this can be quite frustrating. If you opt for a loan at par pricing, you may also have to pay a higher interest rate to the lender to cover the cost of the broker’s commission. This could increase the amount of money that you have to spend.
This category includes the vast majority of mortgage lenders in the United States. Direct lenders and retail lenders both fall into this category. This includes credit unions, Internet-based lenders, and traditional banks.
Organizations like these obtain money for the mortgages that they provide by borrowing from warehouse lenders at short-term rates. Once the loan closes, the banker sells it to independent investors or to an agency that backs mortgages in the United States. They then use that money to repay the warehouse lender.
Lenders in this category work with borrowers directly rather than with organizations. Some common types of retail lenders include mortgage bankers, credit unions, and traditional banks. Lenders like these also provide other financial products along with mortgages including car loans, personal loans, and checking or savings accounts.
Lenders in this category either use the money of their own or money that they borrow from someone else to originate loans themselves. Portfolio lenders and mortgage bankers both are sometimes direct lenders. The difference between a retail lender and a direct lender is the fact that they specialize only in home loans.
Retail lenders have a variety of financial products available for their customers. They also have strictly defined rules regarding underwriting. Direct lenders, on the other hand, have a little bit more flexibility when it comes to helping borrowers qualify for mortgages since they work exclusively with home loans. Similar to retail lenders, direct lenders don’t work with mortgage brokers. That means that you need to apply directly with them if you want to compare rates. Direct lenders are usually based primarily online. If you like the idea of being able to meet in person with your lender, this may not be the best option for you.
Lenders in this category use their own funds to provide loans to borrowers. Since lenders like these don’t work with other investors, they are free to set their own terms or standards regarding borrowing. This may make them more attractive to some types of borrowers. For instance, people who are purchasing investment properties or who require jumbo loans often find that portfolio lenders are a lot more flexible to work with than other types of lenders.
Wholesale lenders don’t work with borrowers directly. Instead, they provide loans through credit unions, traditional banks, or mortgage brokers. These lenders fund, originate, and occasionally service the loans. Since the wholesale lender is responsible for establishing the terms of the loan, their name is the one printed on the loan documents – not the name of your mortgage broker. Mortgage banks frequently have two different divisions – one in charge of retail lending and one in charge of wholesale lending. Loans like these are typically sold after they close on the secondary loan market.
Correspondent lenders usually fund and originate their own loans. In some cases, they also service them. Usually, however, they turn around and sell the loans to sponsors or investors. These investors then sell them to other investors through the secondary mortgage market. When a loan closes, correspondent lenders take a fee for themselves. They then attempt to sell the mortgage to an investor right away. This allows them to earn money while at the same time eliminating the risk of having to deal with borrowers who default. If they can’t find an investor to purchase the loan, they have to hold it themselves or find another sponsor to buy it.
These lenders provide short-term funding to other lenders so that they can fund loans for borrowers. Lenders who use lines of credit like these typically repay them as soon as they sell the mortgage to a buyer on the secondary market. Warehouse lenders don’t work directly with borrowers. The mortgages are held by these lenders as collateral until the correspondent lenders or mortgage banks repay the short-term funds they have borrowed.
Hard Money Lenders
These lenders are either individuals or investment companies that have a lot of cash on hand. They lend money to people who have a hard time qualifying for loans through portfolio lenders. They also work with borrowers who fix up properties and flip them for a profit. Hard money loans typically have to be paid back within several years. Usually, loans from hard money lenders close right away and have flexible terms. However, the origination fees and interest rates are usually quite high – sometimes climbing to anywhere between 10 and 20%. Borrowers also have to provide a significant down payment. The property is typically used as collateral for the loan. If the borrower fails to repay the money, the lender will then take them home.
Comparing Mortgages On The Internet
The majority of mortgage brokers and lenders offer online applications. This makes it easy to compare loans, even for people who are extremely busy with their jobs or families. Many lenders also have modern tools like apps available that allow you to apply for, keep track of, and manage your mortgage using your phone or another mobile device.
If you search for mortgage lenders on Google, you will get close to 72 million results. In addition, you will also be bombarded with ads for lenders who claim to be the best. With so many options out there, trying to decide which lender to work with isn’t easy. Spend some time looking at websites from a variety of lenders. This will give you a chance to familiarize yourself with the different types of loans that are available as well as the borrowing process and the current rates. Lenders who only provide loans through the Internet are a good option if you don’t want to meet in person with a banker. You can also check to see what options are offered by your current credit union or bank. To find the best deal, it is important to compare all of your options.
When browsing through your options online, you probably will see different websites recommending certain lenders. Remember that these sites typically only have relationships with a small group of lenders. In many cases, they also earn commissions for referring borrowers to the lenders that they feature. It is always best to look around on your own rather than relying solely on recommendations.
You can make the process of choosing a lender a little bit less intimidating by learning as much as you can about the different types of lenders ahead of time. To accurately compare loans, you may need to submit applications with several different lenders. Gather together your documentation ahead of time. If you have any problems with your credit report, income, or finances, mentioning these issues upfront will improve your chances of finding a loan that will work for your specific needs.
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!
Mortgage Broker & Direct Lender In Texas: An Analysis
If you have found the perfect house after a long search, then the next step is to secure a mortgage. A majority of people are usually stressed by this process. First, your finances must be in order, then you have to check your credit rating, and choose where to get your loan from. Typically, you have two options, a mortgage broker or a direct lender.
A broker is usually an intermediary, assisting you to determine the best lender for your circumstances and assembling all the information required for the mortgage application.
A direct lender, as the phrase states, is a financial institution such as a bank that will assess whether you are eligible for the loan, and if you are, provide the financing.
A mortgage broker is useful in assisting you to compare alternatives. They will collect different quotes from various financial institutions and present them together to you.
A competent mortgage broker must have the ability to pool more details together, like which lenders provide loans in your location, which provide a specific kind of mortgage that is beneficial to you, and which accommodate or reject applications on mortgages for specific home types such as condos, co-ops, or multi-family homes.
Some financial institutions work only with mortgage brokers, offering borrowers access to mortgages that they would have difficulty coming across.
Thus, rather than submitting an application to every lender separately, you are served through one individual, the broker, to receive information on the type of loan you may qualify for. After you choose your facility type, the broker will liaise with you to submit your application.
Normally, the broker receives a commission, usually a percentage of the mortgage amount. This can sway his research and recommendations. Similar to some fee-based financial planners, some brokers partner with particular lenders which affects the options they present to you.
A direct lender is a financial institution that provides mortgage facilities. A majority are saving and loan associations as well as banks.
If you elect to use a direct lender instead of applying through a broker, you might need to apply to different lenders. It’s similar to a college application. Submit an application to the one with the most favorable terms, then have a backup if your best option is not successful.
You might receive your top offer from a financial institution where you are an existing account holder or from one where you fully repaid a debt from previously.
The direct option can be quicker since there is no intermediary and you are dealing with the bank directly and getting immediate feedback on your queries.
It is not a must that you stick to using only one of the two. You can contact both direct lenders and mortgage brokers to compare their terms and then evaluate them before choosing your approach.
A broker is a right choice for you if you do not want the inconvenience of contacting different lenders. On the other hand, if you have an existing cordial relationship with your bank, you can work directly with them.
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. Contact us today Or Call Us @ (866) 772-3802
Helpful Guide To Choosing A Texas Mortgage Company
For many people, applying for a home loan is seen as an easy but necessary step towards their goal of owning a home. To this end, many lenders afford people the chance to apply for a home loan with them. This may sound quite encouraging for many people, however, the real problem is usually choosing which company to apply to for your home loan.
To ease this process, we highlight some of the attributes you should look for when making this choice. The best mortgage providers have a certain set of characteristics.
The qualities to look out for in a good mortgage company are;
Must Listen To & Focus On Your Unique Needs
The most important questions to ask are; Is this shy-lock concerned about my needs? How are they addressing my needs? Remember, the real estate sector is a very complex sector with several parties with various interests, therefore, as a newbie in this field, you are likely to end up caught in a web of confusion.
The pawnbroker you see should be able to answer all your questions and expound on all the clarifications you require. In the event you are not sure about which brand fits your needs, the loan shark should assist you in the steps to take.
Experience Of The Company
Banks that have operated in the real estate industry for more than 20 years are excellent mortgage lenders. Since you are fresh in this field and just an ordinary person, the company must provide you with relevant and insightful information to make the best decision. Most likely, a bank with a shorter history in real estate will lack the necessary experience and expertise to provide the important information you need. This means their short term experience limits their knowledge on the real estate industry and their ability to provide the best solutions for you.
Choose a mortgage company with an excellent reputation to avoid having regrets in the future. A company with a good reputation is known to provide transparent, genuine, and favorable solutions to its customers. In most of the cases, these are lenders who do not charge exorbitant fees and interests that are likely to negatively affect the financial well-being of their customers. To gauge the reputation of a company visit their website as well as online review sites to read some of the comments left by customers.
Provides Insurance Coverage
A company that provides an insurance policy to ensure the loan that you are taking up is clearly a top of the range provider. If you pass away before fully repaying the mortgage, the insurance policy will cover your outstanding debt. Due to the insurance coverage, your personal properties will not be attached as securities to your loan. This will assure you that you have chosen the right option for yourself and give you peace of mind regarding your financial status. The best-in-class providers give the best terms, so insist on the best to receive the quality mortgage you deserve.