How much do you pay a mortgage lender? Mortgage brokers are most often paid by lenders, sometimes by borrowers, but, by law, never both. That law is called the Dodd-Frank Act, also prohibits mortgage brokers from charging hidden fees or basing their compensation on a borrower’s interest rate. You can also choose to pay the mortgage broker yourself. Mortgage lenders get their money from banks, also known as investors. Unlike banks and credit unions, most lenders do all their own loan processing, underwriting and closing functions “in-house.” They can take care of the entire process with internal staff. The easiest mortgage for you to qualify for is, FHA mortgage requirements. Qualifying for a mortgage backed by the Federal Housing Administration (FHA) may be easier than a conventional loan. Because the FHA insures the mortgage, FHA-approved lenders can offer more favorable rates and terms to first-time homebuyers.
Some people try to use a bank instead of a mortgage lender, let me explain why a Mortgage Lender is the better option in the long run. Mortgage companies sell the servicing. Unlike a mortgage “broker,” the mortgage company still closes and funds the loan directly. Because these companies only service mortgage loans, they can streamline their process much better than a bank. This is a great advantage, meaning your loan can close quicker. The process with a mortgage lender is also much faster, The timeframe in which it takes for mortgage funds to be released does vary between lenders, however, it is common for funds to be released within between 3 and 7 days.
Local lenders know the market in your area better than anyone else. That means they have a better understanding of property values and the local economy. When you work with a smaller, local lender, you’re paired with a licensed loan officer and team of professionals who are experts in the region you’re buying into. Some agents choose their preferred lenders because they get deals closed quickly and reliably. That’s also good for buyers, but the missing element in this equation is the loan cost. The in-house lender may feel that they have you “buttoned up” as a customer. They may feel they no competition for your business. You may be wondering how far mortgage lenders look back on your credit history, Mortgage lenders will typically assess the last six years of the applicant’s credit history for any issues. Be sure to take extra careful care with your credit and take care of it while you are building it in order to purchase your dream home. Below I will list some questions you should inquire about while you are meeting with your mortgage lender at MCS Mortgage Services:
Mortgage Questions to Ask Your Lender
- Which type of mortgage is best for me?
- How much down payment will I need?
- Do I qualify for any down payment assistance programs?
- What is my interest rate?
- What is the annual percentage rate?
- Are you doing a hard credit check on me today?
What your lender will ask you
- How much do you earn? Annual income is a crucial factor for all mortgage lenders as it gives them an estimate of what they can realistically lend.
- Do you have any debts?
- What do you spend your money on?
- Do you have children?
- Where is the property?
