mortgage lender

Picking Your Mortgage Lender

A mortgage definitely does not fall into the “small” or “short term” category. Whether you have a 10, 15, or 30 year mortgage- you have signed yourself up for the full marathon. Yes, you are in it for the long haul.

Since you will be working directly with your mortgage lender throughout this entire period of time, it is smart to shop around and educate yourself on the best lenders available.

Not all lenders are made equally

Some lenders are known for their work with borrowers with low credit scores. Others are known for their low rates. Others are just well-known because they are one of those larger institutions. That being said, it is essential to shop around- double dip- to take a look at all of the options available to you before selecting your lender.

And it is never a bad idea to find a lender you feel comfortable with, whether is is with the rate they can offer or their focus on excellent service.

 

The “how to”

We have a few recommendations when it comes to selecting your mortgage lender. First and foremost, take a look at all of your options. Because there are quite a few options when it comes to mortgage lenders. There are credit unions, mortgage bankers, correspondent lenders, savings & loans, and mutual savings banks.

Credit unions are member-owned institutions that will generally offer favorable interest rates to shareholders. And many have more relaxed membership restrictions, so more people are eligible to join.

Mortgage bankers are actually bankers who work for a larger financial institution and are responsible for packaging mortgages for consideration.

Correspondent lenders typically are local mortgage companies. They have the resources to offer loans, but they do rely on larger lenders (these are companies you will most likely recognize from mainstream advertising).

Now, Savings and Loans are the foundation upon which the entire mortgage industry has been built. While they are few and far between, they are typically much smaller than your typical mortgage lender and are very involved in the surrounding community.

Finally, mutual savings banks are similar to Savings and Loans. They are community oriented, but much more competitive.

Double dipping

While it may be frowned upon with the salsa dish at parties, there is nothing wrong with looking at a few different lenders to compare rates.

Based upon your credit score, debt-to-income ratio, and a few other qualifications, different lenders will, generally speaking, offer different rates. By looking at all of your options, you will be able to effectively and efficiently decide which lender is best suited for your needs.

 

Our final word of advice?

Talk to actual people. Ask questions. And don’t settle. Because you are going to be working with them for the entire duration of your mortgage.

 

 

Total Home Lending

 

 

Natasha Mason

Picking Your Mortgage Lender2020-09-28T15:14:20+00:00

Credit Dispute & A Mortgage

 I’m sure if we asked each of you, right now, to name one thing that you think can make you ineligible for a mortgage, you could each name at least two.

 

One of those is a credit dispute.

What exactly is a credit dispute? When you have found a discrepancy or inaccuracy on your credit report and have reported it so it can be resolved, that is a credit dispute. Essentially, you are disputing the credit score that has been provided to you by a credit bureau. And, of course, law requires credit bureaus to release accurate credit scores.

 

 

But that won’t happen to me, right? Actually, discrepancies in credit scores is much more common than people think. There was a study done in 2012 by the Federal Trade Administration that recorded one in every five Americans have some error on their credit report.

That doesn’t necessarily mean your identity has been stolen or someone has taken a credit card out in your name. It can be a simple as an incorrect address or point of contact. Regardless of how big or how small, once you have reported it, it has become a “dispute.”

And a dispute automatically means an inflation of your credit score.

 

It’s all about accuracy

Unfortunately, even though your score has been temporarily inflated while the dispute is being resolved, it may prevent you from getting approved for a loan. And that’s simply because lenders want an accurate representation of your credit report; the one you are giving them is subject to change.

There are just a few things to keep in mind, moving forward with your mortgage. Credit disputes are not resolved overnight. They can take months to handle. And depending on your situation, you may not actually have that kind of time.

If you are in the middle of purchasing a home or refinancing on your home, it is best to speak with a mortgage expert first. The higher interest rate, the additional costs from delaying the closing may not be worth the wait. Especially if it is a very simple dispute, such as one over an address.

 

 

We have said this before, but it is definitely true: everyone’s situation is a unique situation. In order to determine the best next steps, talk to one of our mortgage experts- they can evaluate the situation and may shed some light on the situation that would not have occurred to you otherwise.

 

Total Home Lending

 

 

Natasha Mason

Credit Dispute & A Mortgage2020-09-28T15:14:20+00:00

So, what happens when I can’t make my mortgage payments?

We are here to have the difficult conversation with you- the one about what happens when you can no longer make your mortgage payments.

First and foremost, ignoring the problem is only going to cause further financial hardship as time goes on. While pretending the problem does not exist may seem like the preferable option, it is the option that will certainly end in foreclosure. Addressing the issue head on is going to be the most effective, even though it is quite the “sticky” topic.

So, what can you do when you can’t afford to make your monthly payments? Here are a few recommendations that can serve as a lifeboat during tough times.

 

Communication is key

The minute you recognize you can no longer make those payments, it is crucial that you communicate that to your lender. The longer you wait to address the issue, the less options you may have. So, communicate!

Come to the conversation prepared. Have details on why you can’t make your payments and if it is a long- or short-term concern. It is also essential to include details about your income, debt history.

Foreclosing on a home is not necessarily the “best” option for your lender. Opening up these lines of communication with them (early) will give you the opportunity to find a solution that best addresses your current situation.

 

Refinancing

While refinancing can appear great, in theory, it is important to acknowledge the other fees associated with refinancing. Let’s say you have 10-15 years left before paying off your mortgage. Refinancing could provide the opportunity to extend the life of your loan, resulting in lower payments.

This is different for each situation, for each person or family. In order to determine whether or not refinancing is the best option for you, talk to your mortgage lender. They can provide more details on your unique situation.

Ditch the house

Easier said than done. And there are two different options you have here- short sale and a deed in lieu of foreclosure.

A short sale is when the bank allows the homeowner to sell the home for less than they owe on the mortgage. This option is sometimes considered less than desirable to lenders, because they are essentially receiving LESS money back than they originally lent. But, it is an option that is less damaging to your credit score (than, say, foreclosure).

Deed in Lieu of Foreclosure gives a homeowner the opportunity to sign the deed of the house over to the bank, rather than the bank foreclosing on the home. So, here, you turn the home over to your lender so they can, in turn, sell the home.

Before deciding that either of these are the next course of action for you, we recommending talking to a housing counselor and a tax professional. They can provide more insight into the implications of taking this step.

 

Bankruptcy

This is definitely not the easiest thing to do. It will destroy your credit, making it hard to borrow money for multiple years.

It is still possible to declare bankruptcy and keep your home. In a Chapter 13 bankruptcy, borrowers are still able to keep their home, but they must have a stable plan for repaying most of their debt.

While not your first line of defence, declaring bankruptcy is definitely still an option.

 

Time to rent

If you do not want to give up your home, but you can no longer afford your monthly payments, one option is renting out the house. Depending on the area you live in and the demand for rental properties, this may be a viable option for you. However, it is crucial to remember that becoming a landlord is not a “simple” endeavor. But if you are able to secure a renter and a secondary location for you to live while you are renting, this may be a way to save you from foreclosure.

So, whether you are on the verge of foreclosure or you have just stumbled upon financial hardship, we recommend you talk to your lender. The sooner you can open those lines of discussion, the more options you will have at your fingertips. And each situation is unique, so while these are some of our general recommendations, your lender will have information and details specific to your situation.

Total Home Lending

 

Natasha Mason

So, what happens when I can’t make my mortgage payments?2020-09-28T15:14:21+00:00
Go to Top