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.
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. The disadvantage with mortgage banks is that it takes time for an applicant to get a loan approval because of the many pending applications on file and that their mortgage policies are stringent pertaining to requirements. Sometimes, in cases where loan applications are disapproved, mortgage banks will courteously provide referral information to where you can seek applications in other lending institutions.
The second best mortgage lender to go to is a savings and loans institution, which is better known as a portfolio lender. 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. Take note that there are also lending institutions that function as both mortgage bank 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 edge of mortgage brokers is that due to their networking skill and experience on house loan applications, they can easily advise an applicant where to submit the loan and have a faster approval, either to a portfolio lender or mortgage banker, and, at the same time, any disapproved loan can be remedied by them by simply re-packaging the loan application and submitting it to another lending company.
The latest trend in the mortgage lending industry is that for reasons of allowing more people to own fast a home, real estate companies and builders, especially the big companies, are also into mortgage lending, having established their own and, therefore, this arrangement may easily allow people to own a house but at the expense of a higher interest rate, which translates to greater profitability for the real estate company. Caution is the best advice when entering into these kinds of offer and weigh everything carefully so as not to be entangled into a bad loan.