Pre-Approval is Critical

Before enlisting our help, it is critical to the success of the process that you get prequalified by a lender. This will pave the way for a much more relaxing home search. When we know what your bank is willing to give you, we can focus our efforts on homes that fit within your means, and the more focused we are, the more likely it will be that we find what you’re looking for faster.

Obtaining a mortgage can be intimidating, but overall, it is a simple process. There are some things that you need to consider. Understanding the differences between the types of lenders will help you make a decision when choosing who your note will be held by. Knowing how long you want to be paying for your house is also something you’ll need to know.

Mortgage Broker

A mortgage Broker is someone who shops mortgages for you. They are the middle man, and as a result, will charge you a premium to find someone who is willing to fund your loan. They will take your information and send it to many different financial institutions to find you the best program to fit your lifestyle. An advantage to them may be that you will find a better loan for your home, so the premium you pay may be worth it.

Mortgage Banker

A mortgage banker actually writes the note and funds your purchase. There is no middle man and therefore, your expense may be less. It takes a while to build a strong relationship with your bank, but they can usually help you purchase your home. A disadvantage to going direct to your mortgage banker is that for each mortgage banker you visit, you will need to submit the same qualifying documents over and over again. If this isn’t worth your time, you may want to consider finding a good Mortgage Broker.

Once you have found the right Broker or Lender, you will probably need to provide them with proof of income, and they will run a credit history report to see what type of financial repayment habits you have developed over time. They will also ask you some questions like:

• What type of loan do you want? This is something you’ll need to research. There are many different types of loans that you can obtain, and each one has its advantages and disadvantages. There’s a 30 year fixed rate loan, interest only loans, adjustable rate loans (ARM’s) as well as many more. Ask your lender which one he or she thinks is best for you.
• Do you have a down payment? The more money you can put down on your home, the lower your monthly payment will be. Keep in mind, however, that money tied up in your home will only appreciate at the same rate your home appreciates. If you’re conservative, and you believe paying cash for everything is the best practice for you and your family, then a 30 year fixed interest loan with a large down payment may be your best bet. If you’re an investor and you’re looking to create passive income through rentals and remodeling efforts, then a shorter term adjustable rate note may be your best bet. It’s really up to what your financial plans are, which you should always discuss with your financial advisor or accountant before-hand.

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