Wednesday, June 30th, 2010 at
6:30 pm
The mortgage market is extremely competitive, so much so that lenders are vying for your business. If you are planning on going for a new home mortgage, then it’s time you know the various kinds of lenders who are involved.
Mortgage banker
This is a company or an individual that is involved throughout the entire cycle of the loan. So right from beginning till the end of the loan tenure when the loan is closed, the mortgage banker is involved. You may directly interact with the mortgage banker for all your transactions. The mortgage banker makes his money from the new home mortgage via all the associated fees, closure costs as well as points earned during the loan cycle. Once you close the loan, you could choose to continue maintaining the relationship with the mortgage banker or they might even sell off the loan to another person or entity.
Mortgage broker
You maybe suffering from a poor credit score or you may just not have ample time on your hands to shop around for the new home mortgage. In such situations, opting for a mortgage broker to help you out is the best way. The mortgage broker is essentially a middleman of sorts who will intervene between the borrower as well as the mortgage banker. He or she has a thorough knowledge of the best deals around in the market or which lending companies are more likely to grant loans to sub prime borrowers or those with a bad credit history.
Credit unions
If you are already a member of a credit union, then this can well be one of the best places to shop around for a new home mortgage. They can provide you with lucrative low interest rates which you can leverage to your advantage. There are many workplaces, associations as well as unions that offer their very own in house credit unions.
Government loans
Many borrowers have the wrong impression that the government actually makes new home mortgage loans. However that is a misconception. In most cases the government supports or backs up certain loan types. This support or backing by the government in turn helps lenders to be more likely to grant these loans. It could be because they have the added assurance of support and intervention from the government. You can easily approach your very own neighborhood local banker to find out the best deals that are backed by government authorities.
Direct lenders
You can also check with online mortgage companies that can assist you with finding a good quality direct lender. They may even help you to find a reputed home loan broker of choice. They usually suggest such lending institutions based on your individual requirements and financial goals. Comparing rates online is a great way to arrive at an informed decision and to assess schemes from various lenders. So if you happen to shop around a little bit or just asked around for the rates you could actually get a good mortgage deal.
By: Alan Lim
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Tuesday, June 29th, 2010 at
11:16 pm
A broker acts as an intermediary who sources loans on behalf of individuals or businesses.
Traditionally, banks and other lending institutions have distributed their own products. However as markets for mortgages have become more competitive, the role of the broker has become more popular. Today in most developed markets brokers are the largest distributors of mortgage products for lenders.
Banks’ activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to High Net Worth Individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profits. Central banks are normally government owned banks, often charged with quasi-regulatory responsibilities, e.g. supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as Lender of last resort in event of a crisis.
The nature and scope of a broker’s activities varies with jurisdiction. For example in the UK anyone offering brokerage is offering a regulated financial activity; the broker is responsible for ensuring the advice is appropriate for the borrowers’ circumstances and is held financially liable if the advice is later shown to be defective. In other jurisdictions the transaction undertaken by the broker may be limited to pointing the borrower in the direction of an appropriate lender and no advice given.
Therefore the work undertaken by the broker will depend on the depth of their service and liabilities. Typically the following tasks are undertaken:
Marketing to attract clients
Assessment of the borrowers circumstances (Mortgage fact find forms interview). This may include assessment of credit history (normally obtained via a credit report) and affordability (verified by income documentation).
Assessing the market to find a mortgage product that fits the clients needs. (Mortgage presentation/recommendations)
Applying for a lenders agreement in principle
Gathering all needed documents (paystubs/payslips, bank statements, etc.)
Completing a lender application form.
Explaining the legal disclosures.
Submitting all material to the lender.
A broker works as a conduit between the buyer and the lender, the loan officer typically works directly for the lender. Most states require the broker to be licensed. States regulate lending practice and licensing, but the rules vary. Most have a license for those who wish to be a “Broker Associate”, a “Brokerage Business”, and a “Direct Lender”.
A broker is normally registered with the state, and personally liable (punishable by revocation or prison) for fraud for the life of a loan. A loan officer works under the umbrella license of their current institution. Both positions have legal, moral, and professional responsibilities as well as liabilities to prevent fraud and fully disclose loan terms to both consumer and lender.
Typically, a broker will make more money per loan than a loan officer, but a loan officer can utilize the referral network available from the lending institution to sell more loans. There are mortgage brokers and loan officers at all levels of experience.
By: Tarun Jaswani
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Friday, June 25th, 2010 at
2:59 pm
What is the direction of Direction of Texas mortgage rate?
Down…which is why this is the best time for homeowners in the Lone Star State to refinance their mortgages, pay off unsecured debt and enjoy lower payments every month.
Because the economy has been so badly managed for the past seven years, the Federal government now has to scramble to find a way to keep everything from collapsing. As a result, the Federal Reserve (which is not a government agency, but a private corporation that controls the nation’s money supply) now has to increase the availability of money by lowering rates yet again. Currently, we’re seeing mortgage rates lower than they’ve been in several years – as low as 5.5% in some cases.
Can your Texas mortgage broker help you? Undoubtedly. Mortgage brokers represent hundreds of companies and loan programs, and are therefore in an excellent position to find the program that can fit your situation the best.
Take advantage of the direction of mortgage rates in Texas and you’ll enjoy:
- Lower payments. Credit card companies (not your legislators) wrote laws that allowed them to double minimum payments. They are also legally able to charge interest rates as high as 29%, even for customers who pay their bills every month (it’s in the fine print of your credit card agreement). A home equity line of credit has a lower interest rate that will remain the same for the life of the loan – resulting in lower payments.
- A Better Credit Score. High levels of unsecured debt are great news to the credit bureaus, because it gives them another excuse to stick it to the working American by keeping him/her in that “sub-prime” category. When you pay off that unsecured debt, it looks a whole lot better on your credit report – and every retired debt helps.
- Tax Benefits. Before 1982, there was a tax deduction for credit card interest. President Reagan took that away from working people in his tax reforms of 1982. The interest on a home equity loan is usually tax deductible however, meaning substantial savings when April 15th rolls around (consult your tax advisor).
It takes little time to find and contact a Houston mortgage broker and get the process started. The bad news is that nobody really knows how long these low rates will last, so now is the time to take action – especially if you are carrying an adjustable rate mortgage. Those rates have nowhere to go but up. Bail out of that ARM and get the security and stability of a fixed rate mortgage today.w
By: Jonathan Blocker
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