Looking for the Top Mortgage Lender in Philadelphia?
When you’re searching for your first home, you’re also searching for your first mortgage lender.
Now, it’s difficult to make specific recommendations on lenders because it’s way too tough to stay up to date on the many thousands of lenders who work in the Pennsylvania Area.
However, USDALoanInfoPA can give you some very useful tips for how to approach your search for a lender.
When you’re looking for a mortgage lender you want start off by talking to a mortgage broker who has a good reputation in your area.
In 2015 there are several types of different mortgage loans that are available. How do you wade through them to find out which one will be the best option for you? One way is to learn about the pros and cons for each type and then narrow the field from there. To that end, we will discuss a few of them and their pros and cons.
Fixed Mortgages vs. Adjustable Rate Mortgages
When you are looking at taking out a mortgage then you first need to decide whether you want one that has a fixed rate or one that has a rate that is adjustable. Every single type of mortgage will be either one or the other. Incidentally, you might also have a mortgage that combines the two. Here is a quick breakdown of the differences.
- Fixed Rate loans will have an interest rate that will remain the same for the duration of the loan. Due to this, your monthly payment will remain the same until the loan is completely repaid.
- Adjustable Rate loans have a rate of interest that can and will fluctuate. In many cases you will have a fixed rate of interest for the first year and then will change on a yearly basis. Loans that have this first 'fixed' period are the hybrid loans.
Loans of both types do have their pros and cons just as all things do. A pro for adjustable rate loans is that the interest rate that they begin with is often lower than that of a fixed rate loan. However, the interest rates in the future will vary and this can turn into a con quickly. The monthly payments on an adjustable rate mortgage can and often do rise exponentially the longer they are carried. Alternatively, a pro for the fixed rate loan is that your monthly payment amount will never change. However, due to that the rate of interest is generally higher.
Jumbo Loans or Conforming Loans
Aside from the basic types of loans there is another thing that must be considered. That is the actual size of the loan that you need. The amount of money that you are requesting will put your loan into one of two categories: jumbo loans or conforming loans. What is the difference?
- Jumbo Loans will be for an amount of money that exceeds the limits for conforming loans that are set forth by the Freddie Mac and Fannie Mae organizations. The lender of these types of loans will have a higher amount of risk than that which is experienced with a conforming loan. However, borrowers for this type of loan must have a credit history that is impeccable and must also come up with a substantial down payment as compared to what is necessary for a conforming loan. Additionally, interest rates for jumbo loans are typically higher when compared to the rates associated with a conforming loan.
- Conforming Loans are those that meet the parameters set forth by the Freddie Mac and Fannie Mae organizations. Typically these guidelines have to do with the size of the loan. Both Freddie Mac and Fannie Mae are entities that are controlled by the government. They both sell and purchase securities that are backed mortgages. In plain English, they buy the loans from various lenders where they are generated and then they sell those loans to various Wall Street investors. Conforming loans will be those that fall within their regulated size limits as well as those conforming to their other criteria.
Now that you have this information, making the decision as to which type you need should be a little easier.
You should also, at the same time, talk to a regional lender, a credit union (if you belong to one or you can join one) and a small local bank.
Each of these different types of lenders will offer different loan programs at different prices.
You should also ask friends and relatives who they’ve used for their home loans and how the experience went.
But emphasis is on the experience.
I have a great friend who once asked her sister for a lender recommendation, and the sister gave her a name and my friend had this horrific experience.
And when she went back to her sister to see what kind of experience her sister had had with this person, the sister confirmed that she, too, had a horrific experience.
“Hello! Why did you give me that lender’s name?” my friend asked, and the sister said, “Well you weren’t specific that you wanted someone good.
Sounds like a Seinfeld episode, right? And yet, this kind of stuff goes on all the time.
So here are some questions you should ask the person providing the recommendation that will help separate the wheat from the chaff:
- Did the lender repeatedly ask for the same documents?
- Is the lender organized?
A good lender should enable you to close on a home within about forty-five days – unless there’s some real serious problems with the house – so make sure to ask your friends and relatives if their lenders were able to meet that standard.
It may sound obvious, but it’s a good idea to look for a lender who specializes in making residential loans and has a reputation in your area for coming through with these loans.
Banks that aren’t generally known for their mortgage lending can be tougher to work with than some of the really big lenders.
And while you may be thinking to yourself, “I want to avoid the big banks,” you’re probably going to end up with one anyway.
Even if you go with a mortgage broker, that mortgage broker may actually work with a whole bunch of big lenders to fund your loan.
Above all, you need to find a lender that helps you understand the mortgage application process in a way that makes you feel comfortable and secure.
This is a huge decision.
You’re going to finance this property for the long run, and you want to do that with the right kind of partner.
And I just want to give a shoutout to anybody who is closing around October of 2015.
If you are, please watch the videos that I’ve made on the TILA-RESPA changes that are coming your way.
Right now they’re scheduled to go into effect October 3rd of 2015.
If you are looking to close around that, either before or after, you may have to build in some extra time to make sure that you don’t get caught up in all the craziness that’s going to go on I think when TILA-RESPA actually goes into effect.
Hi everyone this is your Tampa Bay RealtorLance Mohr.
In this video I want to talk about how tochoose a mortgage lender and that I'm going more specifically go over mortgage brokersversus banks versus credit unions.
Tell you the difference between those.
Tell you the pros.
Tell you the cons and then we're going togo over a little bit about what questions you need to ask the lender to make sure youget a really good mortgage lender for you.
So let me start off talking about differenttypes of institutions where you could get home loans.
Through a lot of times when people think aboutbuying a home they think.
Hey, let me just give my local bank.
Bank of America, Wells Fargo a caller whenthey give my credit union their call or what's the whole thing with mortgage brokers? What's a mortgage broker? How does that work? What's the difference between a mortgage brokerand a bank? The difference between that and a credit union.
So I'm going to go over all this.
Let me first start off with credit unionsand you know I'm just going to give you how I see it because I've been in this industryfor over 20 years prior to being in real estate as an agent.
My prior life was a mortgage banker and that'swhat I did for a number of years.
I'm going to give you things how I see.
I'm not a big fan of the credit union.
I think credit unions are great.
They do car loans that you do checking savingsCDs much like a bank.
They have really really good customer service.
They really care about their members and Ithink that's great.
The problem is I don't really think the trainingthere and I'm a person that really really believes in knowledge.
You know I'm not saying that if you work witha credit union or you know someone works with the credit union in or go through a creditunion.
Not saying this about all credit unions.
I'm using this in a general sense.
They just don't have the best training inthe world.
The other problem with credit unions is thepeople who are doing the loans.
The loan offices the credit union a lot ofthem are strict salary.
If they're not strict salary, their salaryplus bonuses and I'll get to this in a little bit later.
So that's why I'm not really a big fan.
Years ago when I used to be in mortgage banking.
I actually used to go to credit unions.
They were some of my clients to get loansfrom because they didn't have all the knowledge and they were telling people they weren'tqualified because they could not work with them.
Now the good thing about credit unions becausethey are so customer service oriented they would pick up the telephone and say hey Lancewe can't do this loan can you do it? So at least they're going to do that.
Banks? Nope, they're not like that.
This is one of the things with banks.
Banks have a lot of a lot of good advantages.
As a matter of fact, if you're going to beusing bond money.
You're probably going to be using banks.
If you need construction loans you're probablygoing to be using banks but banks like credit unions.
They're a jack of all trades.
They're not a master of one.
They're doing the checking, they're doingsavings, they're doing CDs, they're doing car loans, boat loans you name it.
They're doing anything and everything andwhen you tend to go to the loan officers and a lot of banks not all of them.
So again you know if you work with a bankdon't get mad but I know a lot of people that have worked for banks and what happens isyou they get what's called the foot traffic.
They're not going out there hitting the pavementevery day.
A lot of the loan officers where the banksare just sitting in the bank and just waiting for the business to come to them.
They're not going out.
It's sort of like I always look at our industry.
Are you have the lion and you have the gazelle.
Oh, there are a lot of lions with banks butmost of them are gazelles.
They're sitting back.
Again banks pretty much most of the loan officersare on a salary plus a Bonus.
So you know they're not straight commission.
That's one of the things.
Now when it comes to banks again there aretheir pros.
When it comes to banks you have to understandthat they're only one when lending their money.
This could be a problem if you go in and maybefigure on an FHA loan and maybe that's not really very good in their wheelhouse.
They might tell you well you're not qualifiedfor a loan.
They're not going to say well you could probablyget a loan but you just can't get one through us that's the problem because you're onlyusing their money.
If you're a square peg and they have a roundhole you're going to have a hard time fitting in that and that's the unfortunate thing.
You know there's a lot of fallout.
There’s a lot of people banks tend to wantthe cream of the crop buyers.
If you're walking in with 750 credit scores.
Putting down 20% your salary and employeegreat but what happens if you don't fit into that? You may be working with a bank.
You may not know the thing about banks isthey're generally a little higher on the interest rates than say a mortgage broker but they'rea little bit what lower on closing costs because everybody's in-house and that's the nice thingabout banks is their in-house.
Now I will say this if you are going to usea bank.
If you’re going to use a credit union, ifyou are going to use a mortgage broker get someone local don't go with Wells Fargo andgo to some 800 number or you walk into Bank of America and they say oh let me give youthis 800 number Des Moines Iowa and you're what I am in Tampa or somewhere else.
You want someone local.
Out of sight out of mind.
You want someone if things aren't going yourway you could go in there and pound on their desk and say what the heck's going on.
So just keep that in mind but you know themgenerally everybody's in a localized area.
You'll have your underwriter there.
You have your processor there.
They do have some programs that they havea little bit more flexibility on because they could just decide not to sell that but theymight keep it they might keep it in their portfolio but generally speaking the mainthing I would probably rather choose and I'll get into mortgage brokers in just a littlebit.
Why I tend to like mortgage brokers betterbecause a bank their loan officer is getting paid usually a salary plus a bonus.
That’s the opposite.
So, now let’s talk about mortgage brokers.
Mortgage brokers they're basically prettymuch all of them out there.
It's sink or swim.
They don't get paid unless they find a wayto say yes.
So if you walk in like when I was in mortgagebanking and brokering.
If you walked in and I'm with the broker andyou were on an FHA loan program I'm probably going to have one lender for that.
That it's going to be really really focusedon FHA.
If you're VA you're probably going over tothis later.
If you're on maybe a conventional in a fightfor sit down you're over here.
If it's a 20% down you're over here.
If it's a jumbo it's this linker if you goin and maybe you have low credit scores you're over with this lender right here.
So they don't have just their money.
They have everybody's money now.
I know you go into these brokers and they'relike, we have 50 lenders.
Let’s face it most mortgage brokers willonly use two or three.
They'll probably have five to seven at anyone time but they are very efficient because this is all they do and they don't get paidand unless they find a way to say yes that's why I sort of break it up.
Is there are the lions and there are the gazellesand I would have rather have someone that is on a straight hundred percent commission.
That if they don't find a way to say yes theydon't get paid.
That's a huge motivator.
So there is the thing with a little bit differentlike the banks.
Keep in mind brokers broker out so they'regoing to broker out to a bank.
They could even be broken out to the samebank you're getting the quote from.
It's pretty rare but it could happen but they'regoing to have usually a little bit more costly because they're going to have the underwriterin-house and I mean in-house but they're going to charge for that.
They're going to have the processor that therebeen a charge for that.
So they're going to have a little bit morecost but they get their pricing and wholesale pricing not retail like a bank.
It’s usually going to equal out so there'sand if you're looking at going with bond money you pretty much never going to go with a brokerif you're looking to get in a construction loan.
You're probably not going to go with the brokerbut again it's all about choosing the right broker.
It's all about choosing the right loan officerand you know that's what you need to do.
You need to choose the right person.
So I did a video if you want to know how toget the best interest rate I'll put it up above.
You could look at it but let's go over whatyou really need to do when it comes to choosing a loan officer.
You want to always start off with your realestate agent.
First know maybe you could get a recommendationfrom your real estate agent you could get a recommendation from friends, co-workersbut dig a little deeper.
Don't just get that recommendation.
Ask enough to say why you think this loanofficer is so good.
Why are you referring me to this person? What is it about them that makes them so good? You can also go and take a look at sites likeYelp.
Go to their LinkedIn page check their website.
Read up on them but overall loan officersare horrible at marketing so don't hold that against them.
I know when I was a loan officer I wasn'tthe best marketer in the world.
So you know you definitely want to dig a littledeeper and ask him and then when you're talking to them just like an interview in a real estateagent.
You need to ask them two questions at least.
These two questions why should I work foryou and why should I work for your company? Basically, let them tell you what makes themgood.
Let them tell you why you should be workingwith them.
If they don't have an answer to those questionsyou really have to wonder but you know you definitely talk to your real estate agent.
That's a good source and just make sure theloan officer knows what they're doing.
Yeah I mean feel free to ask them what trainingyou have.
I mean I never got this when I was in a loanoffice.
When I was one officer but I had no problemI don't have it when people ask me.
This is a real estate agent if they're interviewingme or asking about my experience or how long I've been in the business or why they shouldwork with me or what makes my company good.
It's not as important as a realtor but whatthe loan officer it's everything if you go into the better business bureau and they don'thave a good rating.
You really have to wonder if that someonewho you want to work with.
So do these and you're going to be good togo but definitely pick loan officer at the end of the day get someone that you trustto get someone that you know is knowledgeable.
Who's been in the business that you feel hasthe proper training because one thing I discuss in my video? How to get a really good interest rate isit's more about the loan program.
If you're in the wrong loan program the interestrate doesn't matter and if you choose a loan officer that doesn't understand differentloan programs and they put you in the wrong one program.
You could have a great interest rate thatone program but it may not be the greatest interest rate you could get or you need.
If you like these videos give me a thumbs-up.
If you want to subscribe to my channel hitthe subscribe button hit the belly button and you'll get notified of my new videos.
I wish you all the best of luck.
If you're looking for a realtor in Tampa BayI would love to help you.