Having A Bad Mortgage Broker Is Like Having A Finder Binder… A Sudden and Small Accident But A Lingering Large Cost To Repair

Key Takeaways:

● When finding the right mortgage lender, comparing interest rates and fees is important; No two
lenders are the same.

● You should have a stable means of income or ability to repay; make sure your income is enough
to affordably service your debt every month.

● Some fees might be associated with a mortgage loan which may be hidden at the time of your
application. Ask about all of them upfront so there are no surprises at the closing table.

Unless you have lots of money to finance all of your needs, a home mortgage loan is the best alternative
available for significant personal financing as a consumer in the market to buy a home. From buying a
house, car to financing your kid’s education or starting a long-term investment, a mortgage can be the
catalyst to achieving your dreams. Before thinking about a mortgage, you should already have good
credit, which typically means a FICO score of 700 or higher, which shows you are a responsible borrower
and not in any financial crisis. Building a good credit history automatically puts you in the game for the
real task of actually acquiring, or buying, a property by utilizing the services of a reputable mortgage
lender knowledge about various lending programs, including creative financing options, that will best suit
your needs and your budget.

Finding the right mortgage lender is more than just securing the lowest interest rate. It requires some
critical factors, some of which have been highlighted below.

1. Study The Mortgage Marketplace

Learning how the mortgage market works will make it easier to find and secure the right lender you need
to fuel your dreams of buying a home. A close study of lending companies available should include
reviewing their interest rate sheet, estimated closing fees, and knowing the additional loan details such as
your cash to close requirement, meaning how much money you have to have wired to escrow in order to
get that loan to fund and close, your monthly payment structure meaning if it is an interest-only loan where
your monthly mortgage payment only pays the principal and interest, for example, or are the taxes and
insurances costs escrowed from your payments as well, which is referred to as PITI, principal interest
taxes and insurance costs are all included costs in the one monthly mortgage payment you make to one
entity, which would be your lender, each month. You also want to know things like the loan type which is
also extremely important. This means you want to know if you are applying for an FHA government-
backed loan, conventional loan, jumbo loan, private loan, portfolio loan, or a USDA loan just to name a
few of the most common. The mortgage company, whichever one you research and feel most comfortable
with, should be able to help you understand all of these critical components to shop for a home loan,
including educating you on the process from the initial onset of your process, through the very end, when
you are ready to have that loan fund and close. Once you have chosen a lender and officially submitted a loan application, the lender should be the one to take it from there to shop rates, terms, and types while
you focus your efforts on the search for your property.

2. Hire a Mortgage Broker

Mortgage brokers can speed up your mortgage application and get you access to loan programs you
otherwise may have never known existed. The steps involved in finding the right mortgage lender can be
a daunting task, so many homebuyers will forgo that search and process together. But like Thomas
Edison once said,” opportunity is often missed because it is dressed in overalls and looks like hard work.”
That is one of our favorite quotes because it holds true whether being applied to home buying, loan
shopping, parenthood, business, or just life in general. In fact, many mortgage lenders out there may not
be the right fit for your vision. That doesn’t mean you shrink the vision, that means you expand your
search and cast your net wider to find a lender who can see your vision for the home you want to live in,
enhance it, and help make it come true for you and/ or your family.

Since many lenders vary from one to another, hiring a mortgage broker can save you many sleepless
nights and stress so a good mortgage broker is worth their weight in gold. Some mortgage brokers may
charge a substantial amount compared to other mortgage brokers, but definitely do the hard work; of
reviewing your options, getting recommendations, and analyzing each mortgage broker’s loan programs to
identify the best one to suit your needs. Also be aware that some might charge a fee, while others might
request a commission which you must pay at the closing. All you have to do is consult a reputable broker
with many years of proven experience and they will know it is their duty to provide proper disclosure to
you regarding any and all fees involved in getting a mortgage loan. At the end of the day, if you have a
mentor or coach, business colleagues, and/ or other investor friends and family, they are a great first and
maybe even only stop you need to make to get immediate recommendations so you have to look no
further.

3. Ask Quality Questions

Perhaps you finally found a lender; what’s next to do? Start application? No, ask questions. Just because
you got lots of recommendations still doesn’t mean you can’t get it wrong. Ask the lender questions, such
as:

● How many banks are you currently approved with?
● How long will it take to review and process your application?
● What will the bank require from you to begin your application?
● How long of an interest rate lock do they recommend?
● What will be my estimated cash to close requirement?

Even if you’re working with a mortgage broker and a realtor who possibly may have referred you to the
broker, make sure you ask questions and be sure to get satisfying answers directly and yourself before
making a definitive decision on who you will go with. Just as easily as a good mortgage broker can make deals, they can just as easily cause deals to fall apart and you to lose a lot of sleepless nights and money at
your expense for the incompetence of a bad mortgage broker.

So do not forget to talk to friends and experts for references first to potentially save yourself the time and
energy spent going at it alone. If you know anyone who has done significant projects in the past, talk to
them – they might be able to suggest a lender you can possibly work with. Other important factors that
will facilitate your success with mortgage borrowing are:

● Learning the lingo of the mortgage industry
● Improving your credit score, if you have less than a 740 FICO
● Monitoring your credit report by pulling an updated one at least every three months
● Saving for a down payment
● Having a stable, verifiable monthly income so you can be lendable when the time comes (bank
statements, paystubs, w2s, tax returns)

As a prospective home buyer, a very important step in the home-buying process is to get pre-qualified for
a mortgage. Why?

– This will give you an idea of the price range that you can afford so that your property search team
can get you in one of the homes that match what you want or connect with a licensed agent who
can go out and find the best deal on a home that is right for you.

– Getting pre-qualified will require that you provide a lender with some basic information on your
income, assets, and debt. We can arrange to have this done for you at no cost.

– Another benefit in getting pre-qualified is that it is an expression of your seriousness in
purchasing a home, which may be a deciding factor in a situation of competing offers from other
not yet qualified buyers on your dream home.

If you want to learn more about securing a mortgage for your first or next real estate purchase, stick
around for more exciting blogs. In the meantime, for more information and access to programs to help
you kick-start your journey to homeownership right away, click HERE to take the next step towards
finding your home, which is getting pre-qualified for a home mortgage loan.