A mortgage is a mortgage is a mortgage. NOT! Not only do mortgages differ between lenders, but they also differ greatly by the lenders, themselves. There are two types of real estate originators — brokers and loan officers.

Brokers generally are self-employed professionals, who work to secure a real estate loan for you. They work through a variety of lenders and earn a fee for the transaction. Most of the mortgage lenders who advertise on the Internet are brokers.

Loan officers are employees of a bank, credit union, or other lending institution, such as a mortgage company. They sell and process mortgages and other loans only for their employers. They are usually local and in a physical location.

There are advantages and disadvantages in using both brokers and loan officers for your real estate purchase, so you need to shop for the one that is right for you and your particular circumstance.

Brokers

The advantages to using a mortgage broker for your real estate purchase are many. Usually, the better deal they get for you, the buyer, the more they are paid on the transaction — a big plus for you. If your local bank, mortgage company, or credit union has refused you a loan, a mortgage broker may be able to find a lender, even if you have bad credit — just expect to pay a higher interest rate. If your real estate is unique or commercial property, using a mortgage broker to secure a loan is at times easier and faster.

One downside of using a mortgage broker is that your mortgage loan will be sold to another lender immediately after closing. Another is that brokers choose to do either non-conforming loans, which are higher risk and usually higher interest rates, or conforming loans. This limits your loan options. Brokers do not have to disclose a “good faith” estimate on what closing costs will be, nor are they regulated by the Fair Credit Act. Additionally, they seldom have a physical office with employees offering you face-to-face customer service, and they generally are in another town or state than where your real estate is located. This means they may not understand the local market in which you purchased your real estate. Important issues may arise from the real estate classifications and terms used by your appraiser, for example.

Loan Officers

Though loan officers offer a variety in the types of loans available, you are limited to only those products offered by one institution. Usually a local institution, the loan officer will be familiar with all local regulations and issues will not arise over lack of knowledge in local market terminology.

Banks and Mortgage Companies
Bank and mortgage company loan officers will give you face-to-face customer services, at least before the closing. Like brokers, banks have the option of selling real estate loans on the secondary market. Some banks sell only low-end mortgages or those that require too much servicing with little return. Some sell the loan but keep the servicing portion, making it appear that your mortgage continues to be owned by the bank or mortgage company. They are required, however, to tell you during the initial paperwork if your mortgage may be sold. I suggest you ask before you ever get to that point, if this is a deal breaker for you.

Bank and mortgage company loan officers are licensed and must meet certain criteria. They have more criteria that you must meet, as well, in order to secure a loan (banks usually require the most). Many real estate buyers are refused mortgage loans by these institutions. Both banks and mortgage companies generally do offer better rates and terms. They also must disclose a good faith estimate on what closing costs will be, and they are regulated and audited under the Fair Credit Act.

Credit Unions
You must be a member of a credit union to apply for a loan with them. Many credit unions do not offer real estate loans. The major advantage of securing a loan from a credit union is that they pass on only actual costs of the loan to you — no broker fees or commissions. They also never sell their loans on the secondary market, they always are local, and give you continuing face-to-face customer service.

What to Do

The time to begin looking for a mortgage lender is before you begin looking at real estate. Ask family and friends for referrals, as well as their experience with the real estate lender. Ask your real estate agent for referrals. Then, contact each prospective lender and ask questions — lots of questions! Compare interest rates, terms, after the closing mortgage sale policies, and what criteria do they require that you meet in order to qualify for a real estate loan.

If you are a residential real estate buyer, consider getting pre-approved for a loan. You will know exactly what you can afford to buy, which usually turns out to be much more than you expect.

Spend as much time shopping for a mortgage lender as you will for your real estate. The deal you get can save or cost you thousands or even millions over the life of the mortgage. Get the best deal possible, as well as the right lender for your real estate purchase.

About the Author

John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more on San Diego Homes for Sale visit http://www.twtrealestate.com

Tags: mortgage, mortgage online, home mortgage, , business mortgage

Have you ever wondered if your agent and loan officer are doing something that could get you into trouble?

You should!

Buying a house is a complicated process and many times your lack of insider knowledge can get you in hot water.

Shouldn’t the agent and loan officer be putting your best interest first?

Of Course!.but unfortunately, it does not work out that way. The deal/transaction gets put first.the part where the agent and loan officer both get paid. Once the agent and loan officer have started working on a transaction, they don’t want anything to get in the way of the commission when it closes. It may be in your best interest to get out of the contract and not buy that home but the agents and loan officers are lazy and don’t want to do the right thing. They want to do the easy thing. In this case, the easy thing is fraudulent and unethical.

I know while you are out looking at houses you have a million things to think about. In my experience, the inspection is something that can really be confusing if you don’t know how to handle it. More importantly, you will be committing loan fraud without the proper counsel.

Usually, after you write a contract on a home and it has been accepted, you as the buyer have a home inspection done. The inspection is different than the appraisal. The appraisal is done to establish the value of the home. Appraisers will inspect the home also. The appraiser will measure rooms to verify square footage and note the condition of the home while they are in there. If they find any major problems that affect the soundness of the home, they will report that in the appraisal. The appraisal is submitted with the other loan documents to the lender.

Even though the inspection is not a requirement for the loan, every buyer should get an inspection. You as the buyer need to know if the property is in satisfactory condition and therefore worth what you are going to pay for it. You also want to make sure the seller isn’t hiding anything from you. Buying a house and then having to spend hundreds or thousands of dollars fixing things the seller didn’t want you to know about is not the dream of home ownership most people think of.

So, if the inspection report is not a part of the loan process.how could you commit loan fraud?

If there are problems identified from the inspection the buyers can either decide they do not want the property in that condition or request the sellers fix the problems before closing. The agents must have the buyer and seller agree in writing on any repairs inside the contract. Unfortunately, the agents like to have what is called “side agreements”. A side agreement is an agreement that is not part of the real estate contract. The contract should be agreed upon by all parties and should have all information true and correct. With a side agreement, there is information that is withheld from some of the people involved in the transaction. The lender who is loaning you the money to buy the home and the title company who is supposed to be the gatekeeper for all the documents to transfer title correctly are the one left out.

Let’s say there was a problem with the furnace on the home you were under contract to buy. You tell your agent you want the furnace to be replaced because the inspection report says it is unsafe. Your agent already knows the seller does not have the money to fix the furnace until after they get the proceeds from selling the house. How does your agent know that? Agents talk to each other all the time without you knowing it. Most agents technically work for the seller. That means they share information with the seller’s agent all the time. They work together to get the deal done and if it is not in your best interest, then so be it.

The seller does not have the money to make the repairs before the close. The agents will have the you and the seller sign a side agreement stating either:

1. the seller will write you a check after the close for the repairs or
2. the seller will hire a contractor for the repairs after the close

The problem with these side agreements is they always favor the seller and more importantly, they are loan fraud.

For example, the inspection states the furnace needs replacing. Your agent is supposed to present the seller’s agent with a contract amendment stating the seller will have a licensed contractor install a new furnace before closing. The seller will either agree to that and sign the contract amendment so it becomes part of the contract or not agree to that and you now have a decision to make. Do you want to buy a house that it supposed to be in good working order at that price when you know now from the inspection it isn’t?

But like we discussed earlier, the agents both know the seller does not have the money to pay for the furnace. The agents are looking at losing their commissions and the seller is looking at losing the proceeds from the sale. So, they have you sign a side agreement. The seller supposedly will give you a check after close for the furnace or have someone replace it after the close.

This happens all the time. The agents and loan officer involved in the transaction would sooner cut off their right arm then lose a commission because of a faulty furnace. Here is what could happen to you ,the buyer, when a side agreement goes wrong.
1. The seller never gives you any money for the furnace or they give you a check that bounces.

2. The furnace is installed after the close by the seller’s choice of contractors. Of course they will want to get the cheapest contractor they can find because it isn’t their house anymore. The furnace get installed incorrectly or during installation something else in your new home gets destroyed and you have to pay for that since it is your house now.

3. The lender finds out about the side agreement and now calls the note due and payable.

If running the risk of depending on the seller and the agents for money isn’t bad enough, think of it from the lender’s side. They are the ones lending the money for your new home. They have a right to know that the collateral is not what is represented in the contract. Even though the inspection is not a part of the mortgage process, the lender doesn’t contract to lend on a house that needs expensive repairs. Not only did you overpay but the lender get cheated too.it is called loan fraud.

Just because I mention the agents most of the time does not mean the loan officer is off the hook. They are supposed to protect the lender from any fraud and in the case of side agreements. What they are basically saying to the agents is, “I don’t want to know about what you are doing just get it done so we all can get paid”. The loan officers are just as guilty as the agents.

The Maine Creditor Update which is the newsletter for the Office of Consumer Credit Regulation has an article in it from its September 2004 issue.

It states, “Buyers and sellers of residential real estate will sometimes agree to “side deals” in which money changes hands to cover the cost of needed repairs or defects discovered on the property. However, if these adjustments are substantial enough to affect the value of the residences being used as security for loans to the buyers, and if the side deals are not reflected in the HUD-1 closing statement, then all parties to the transactions (including the settlement agents and the real estate agents) should carefully review their participation to determine whether legal or ethical principles are being violated.

In any FHA-insured loan, the buyer, seller and settlement agent each sign statements attesting to the accuracy of the figures being used. Knowledge of a substantial side agreement not reflected in the HUD-1 would almost certainly violate these representations. Maine law does not contain specific provisions prohibiting undocumented side agreements, such as the one enacted in Alabama which states that a real estate agent may lose his or her license for “misrepresenting or failing to disclose.the true terms of a sale of real estate” (Ala. Code, sec. 34-27-36(a)(21). However, parties to Maine transactions should not assume that the absence of a state law here means that such deals are permitted on mortgages headed for the secondary market, especially when the loans will be held or guaranteed by government or quasi-government entities.”

If you are going to agree to anything you always do it in writing in the contract. That is what contract amendments are for. Real estate is all about the contract. You can’t un-ring a bell. Even though the only thing the lender saw was the appraisal and it didn’t uncover a faulty furnace, the problem is now out in the open and you have to deal with it. You are ultimately going to pay for the home and keeping a level head about right and wrong is important.

Do not let anyone talk you into signing a side agreement. You now know that it is not in your best interest and it is unethical and fraudulent.

Tips

1. Always get your inspection done early. Make it one of the first things you do after your contract has been accepted. The agents usually try to push this one until the end because they are already afraid something will be wrong and they figure the farther you are down the road, the more you will agree to things that are not in your best interest. Get it done as fast as you can.
2. Don’t use the agent’s inspection company or anyone they suggest. Find one on your own. If you now know that agents will use side agreements not in your best interest, then you also should know that they will use inspection companies that won’t deliver a true picture of the problems with the home just get the deal done.

Good Luck in your House Hunting!

About the Author

Rob K. Blake, author of the book Mortgage Secrets Exposed! and host of The Mortgage Insiders Show, has been teaching folks for the last 15 years all the tips and tactics to save $1,000s when shopping for a mortgage. For more home loan tips, Visit his website www.themortgageinsider.net .

Tags: mortgage online, business mortgage, low price mortgage, home mortgage,

A mortgage is a mortgage is a mortgage. NOT! Not only do mortgages differ between lenders, but they also differ greatly by the lenders, themselves. There are two types of real estate originators ? brokers and loan officers.

Brokers generally are self-employed professionals, who work to secure a real estate loan for you. They work through a variety of lenders and earn a fee for the transaction. Most of the mortgage lenders who advertise on the Internet are brokers.

Loan officers are employees of a bank, credit union, or other lending institution, such as a mortgage company. They sell and process mortgages and other loans only for their employers. They are usually local and in a physical location.

There are advantages and disadvantages in using both brokers and loan officers for your real estate purchase, so you need to shop for the one that is right for you and your particular circumstance.

Brokers

The advantages to using a mortgage broker for your real estate purchase are many. Usually, the better deal they get for you, the buyer, the more they are paid on the transaction ? a big plus for you. If your local bank, mortgage company, or credit union has refused you a loan, a mortgage broker may be able to find a lender, even if you have bad credit ? just expect to pay a higher interest rate. If your real estate is unique or commercial property, using a mortgage broker to secure a loan is at times easier and faster.

One downside of using a mortgage broker is that your mortgage loan will be sold to another lender immediately after closing. Another is that brokers choose to do either non-conforming loans, which are higher risk and usually higher interest rates, or conforming loans. This limits your loan options. Brokers do not have to disclose a ?good faith? estimate on what closing costs will be, nor are they regulated by the Fair Credit Act. Additionally, they seldom have a physical office with employees offering you face-to-face customer service, and they generally are in another town or state than where your real estate is located. This means they may not understand the local market in which you purchased your real estate. Important issues may arise from the real estate classifications and terms used by your appraiser, for example.

Loan Officers

Though loan officers offer a variety in the types of loans available, you are limited to only those products offered by one institution. Usually a local institution, the loan officer will be familiar with all local regulations and issues will not arise over lack of knowledge in local market terminology.

Banks and Mortgage Companies

Bank and mortgage company loan officers will give you face-to-face customer services, at least before the closing. Like brokers, banks have the option of selling real estate loans on the secondary market. Some banks sell only low-end mortgages or those that require too much servicing with little return. Some sell the loan but keep the servicing portion, making it appear that your mortgage continues to be owned by the bank or mortgage company. They are required, however, to tell you during the initial paperwork if your mortgage may be sold. I suggest you ask before you ever get to that point, if this is a deal breaker for you.

Bank and mortgage company loan officers are licensed and must meet certain criteria. They have more criteria that you must meet, as well, in order to secure a loan (banks usually require the most). Many real estate buyers are refused mortgage loans by these institutions. Both banks and mortgage companies generally do offer better rates and terms. They also must disclose a good faith estimate on what closing costs will be, and they are regulated and audited under the Fair Credit Act.

Credit Unions

You must be a member of a credit union to apply for a loan with them. Many credit unions do not offer real estate loans. The major advantage of securing a loan from a credit union is that they pass on only actual costs of the loan to you ? no broker fees or commissions. They also never sell their loans on the secondary market, they always are local, and give you continuing face-to-face customer service.

What to Do

The time to begin looking for a mortgage lender is before you begin looking at real estate. Ask family and friends for referrals, as well as their experience with the real estate lender. Ask your real estate agent for referrals. Then, contact each prospective lender and ask questions ? lots of questions! Compare interest rates, terms, after the closing mortgage sale policies, and what criteria do they require that you meet in order to qualify for a real estate loan.

If you are a residential real estate buyer, consider getting pre-approved for a loan. You will know exactly what you can afford to buy, which usually turns out to be much more than you expect.

Spend as much time shopping for a mortgage lender as you will for your real estate. The deal you get can save or cost you thousands or even millions over the life of the mortgage. Get the best deal possible, as well as the right lender for your real estate purchase.

About the Author:

John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more on San Diego Homes for Sale visit http://www.twtrealestate.com

Tags: business mortgage, best credit mortgage, mortgage, , mortgage online

?There is an increasing amount of enquiries from Bakersfield, California real estate owners wanting to refinance with a Pay Option ARM home loan,? states Ronald Spencer, Vice President of MaverickMortgagesOnline.com

?We can?t attribute this increase to anything specific other than the Bakersfield area is growing, home owners are learning more about Pay Option home loans, and that the program itself is gaining in popularity.?

?A Pay Option adjustable rate mortgage ( ARM ) gives the home owner flexibility to decide which of four payment choices to make, including interest only, every month.

?This program is ideal for a Bakersfield refinance and especially those with a fluctuating income such as the self-employed.?

?For instance, we assisted a self-employed contractor in Bakersfield who was busy during the spring and summer, but due to weather conditions in the winter, business slowed down. When business is going well the contractor was able to make a fully amortized payment but when business slowed he took advantage of the new low deferred interest payment. With this program monthly mortgage payments can be made depending on current cash flow situation.?

?A Pay Option ARM is also ideal for a new home purchase in Bakersfield, first time home buyers that need the lowest possible monthly mortgage payment, or home owners that just want to lower their existing home mortgage loan payment,? continues Spencer.

The Pay Option home mortgage loan is a relatively new product that allows four payment options each month:

1.15 year payment- Pay the home mortgage loan off and build equity faster as well as save thousands of dollars in interest;

2.30 year payment- This option allows owners to pay off mortgage in the standard thirty years;

3. Interest only option- This option allows payment of only the interest portion of the monthly payment to increase monthly cash flow;

4.1% Minimum payment-This option allows home owners to pay the mortgage at a 1% rate of interest for maximum savings. With this option the minimum monthly payment is not sufficient to cover the monthly interest due. To avoid deferred interest home owners should take the interest-only payment option.
?The Pay Option is the absolute best adjustable rate mortgage, ARM, product available today for refinancing in Bakersfield. It has the built-in features that protect from the typical worries associated with an adjustable rate mortgage.?

?One is the fact that the payment cannot increase more than 7.5% above the previous year for the first five years. Another gives the option to convert to a fixed rate mortgage after the first three years.?

?With these features it is understandable why more enquiries are coming from a community such as Bakersfield,? concludes Spencer.

About the Author:

For more information on a Bakersfield mortgage refinance with a Pay Option Home Loan please call 1-866-398-4664 or go to http://www.mortgagemavericksonline.com/CA_City_Home_Refinance/4/Bakersfield,-California-Refinance.php

Tags: business mortgage, mortgage online, , mortgage, low price mortgage

Online real estate mortgage loans enable borrowers to be sure they are getting the best financing rates. By comparing online quotes, you can save time and money with no risk. An added bonus is the ability to apply for loans online from the comfort of your own home.

Tips For Finding Lenders

Before starting your search, gather your personal and financial information in one place. Also, take the time to figure your down payment and loan amount. These steps will save you time with the application process.

With so many real estate lenders online, you may be overwhelmed with offers. The simplest approach is to request quotes for a mortgage website that will list offers from several real estate lenders. These basic quotes will allow you to make a quick judgment as to which lenders you want to follow up with.

How To Compare Financing Offers

After you have compared basic mortgage quotes, choose the mortgage lenders with the best rates to request detailed quotes from. Since there are so many different factors that determine a mortgage rate, you will need to complete the extensive questionnaire to be sure you have an accurate quote.

Once you receive these detailed financing offers, read through them. Look at the rates, but also the fees listed. By adding both the rates and fees, you can determine the true cost of the loan.

Applying For A Mortgage Loan

Applying for a mortgage loan can be completed online or through the mail. Online and paper applications are the same - you just save processing time with online applications.

With both types of applications, you will receive a final set of paperwork through the mail for your review. Once you approve the loan and mail the forms back, your money will be released so you can buy your home.

Refinancing Options

Real estate mortgage lenders also offer refinancing options. Whether you want to make some home improvements or simply reduce your mortgage payments, you can apply online.

You should also consider refinancing if your credit score or financial situation improves. Even if your credit score improves from good to excellent, you may qualify for lower rates. Increases in your cash reserves or a deduction in your overall debt ratio will also allow you to succeed in getting lower rates.

About The Author:
Carrie Reeder is the owner of http://www.abcloanguide.com, an informational website about various types of loans. To view our list of recommended mortgage lenders online. Visit this page: http://www.abcloanguide.com/mortgageloans.shtml

Copyright Carrie Reeder - http://www.abcloanguide.com/mortgageloans.shtml

Tags: business mortgage, best credit mortgage, , home mortgage, low price mortgage