Mortgage News and Insights
3 Sources of Loans to Check When Buying a Home
This Tucson Mortgage News & Insights highlights the 3 key types of mortgage lenders. Many of our home buyers want to know which is best.
Our answer always – it depends!
Banks, mortgage bankers and brokers will all be able to help you get a mortgage. If you qualify!
However, they are not all alike and their costs to the buyer won’t be either.
All use a buyers FICO score and debt to income ratio in making their lending decisions. But there are other factors that may or may not be considered. Knowing what each lender does or doesn’t do may help you choose the better lender – for you!
Lender #1 – Banks
Banks will normally manage the entire loan process from start to finish. Starting with loan pre qualification.
A loan officer is licensed with the necessary federal and state authorities and adheres to the regulations of the banks lending process. A loan officer will bring their expertise to the table when they work with you.
Loan officers know the types of loans their bank offers, and they can give you advice about the best option for you and your situation.
loan officer is your direct contact when you’re applying for a loan. They will research and review your financial history and assess whether you qualify for a mortgage.
One of the critical steps in the mortgage lending process is the Appraisal. They determine whether or not the value of the home being bought is at or above the price the buyer is paying. Lenders subcontract the appraisal to independent appraisal companies.
Lender #2 – Mortgage Bankers
A full service mortgage banker processes,underwrites and funds the mortgage internally. This gives the mortgage banker complete control of the entire mortgage loan process.
Mortgage Banker Loan Officers understand the process and are in a position to communicate any issues and make direct inquiries with underwriting!
All Mortgage Banker Loan Officers must be licensed and are required to take annual continuing education programs.
Mortgage bankers are able to access a number of financial institutions and financing programs. Large mortgage bankers will be selling mortgages directly to Fannie Mae and Freddie Mac. That eliminates overlays.
Mortgage Bankers, as well as banks and brokers, subcontract the appraisal process to an independent third party appraisal company.
Lender #3 – Mortgage Brokers
A mortgage broker is the “Middle Man” in the lending process.
The broker will shop rates & programs available at other mortgage lenders. A Broker has NO control over underwriting or funding. They rely on funding source to close the transaction.
As with the other mortgage lenders, the appraisal of the home will be subcontracted to an independent appraisal company.
What The Better Choice?
So which is better?
The answer will depend on your perspective and experience.
If you want to know our view, give is a call. We will review the choices and give you some insights based on our experience in Tucson AZ.
Conclusion
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