What questions should I ask a mortgage lender in St. Marys ? If you’re dealing with a mortgage broker there’s some questions that you should ask both on your first meeting with the mortgage broker and throughout working with your mortgage broker to make sure that you’re getting the best service possible.
USDALoanInfoPA is going to go through 10 different questions that you can ask your mortgage lender in St. Marys. Be aware that your USDA Loan or Mortgage broker will be getting the loan that you need and the service that you want.
The first question that I think everyone should ask a mortgage broker is a pretty straightforward one.
How Much Will a Mortgage Broker Cost?
Most mortgage lenders in St. Marys actually work for free.
So it doesn’t actually cost you anything in order to do it.
They get money because they are paid by the banks when you successfully get a loan.
So they get a small commission of the loan that you apply for and if you get it.
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So most mortgage brokers in St. Marys will work for free and it won’t cost you anything.
However, there are some mortgage brokers out there who do require deposits or who do require you to pay.
So, it’s important to ask, “How much will this cost me?” when assessing which mortgage broker you want to go with.
How much do Mortgage Lenders earn in commission from me and from my loan?
This is less to understand exactly how much they make.
You can see what percentage of commissions they make and things like that by visiting USDALoanInfo.
But it’s more to understand whether or not they’ll be willing to give you this information.
A transparent mortgage broker is someone that’d be willing to give you this information and you know that they have your best interest at heart.
Can Collections Keep You From Getting A USDA Loan
If they skirt around this issue and they don’t tell you how much they earn.
Well then that would send out red flags for me because I can’t trust them to put my best interest at heart because there are some circumstances where one loan will earn them more money than a loan that could potentially be better for me but not as good for them.
So, I’m just trying to establish whether or not this mortgage broker in St. Marys is someone that I can trust.
And by asking them the big question, the money question,”How much will you earn from me?” That’s a great way to understand whether or not you can trust the mortgage lender.
So ask that question and see how they respond.
Do Mortgage Lenders Invest Themselves?
Now, I don’t think a mortgage broker has to be a property investor in order for them to be able to get you a good loan and for them to help you successfully invest in property.
However, if they are interested in property in St. Marys, if they do invest themselves, then that is going to go a long way to help you because they understand what it’s like to be in your shoes.
They understand what you’re trying to get out of this and they’ve done it themselves so they can help you miss some of the pitfalls and things like that.
If they don’t invest themselves, then I would want to ask them, “Have you worked with many people that invest in property?” Because as mortgage brokers, some of them just work with people who are buying their own home.
How to Find a Good Mortgage Broker or Lender
Some of the mortgage lender folk who work with people who are doing particular investment strategies.
So, some might work with people who invest in positive cash flow property or who invest in rural areas, who invest using developments.
NSH MortgageBlockedUnblockFollowFollowingSep 5, 2017Minimum FHA Credit Score For A Home LoanThe minimum FHA credit score for a home loan is 500, however, it is possible to get a mortgage loan with no credit score at all. FHA Credit Score Requirements Falls 60 Points. NSH Mortgage has the wisdom and tools to help you understand the new FHA credit score requirements.Lenders can check non-traditional credit sources and build a credit report if you do not have enough accounts to generate a score. VA home loans require no minimum credit score, FHA minimums range from 500 to 580, USDA loans have a FICO floor of 640, and conforming loans require a minimum credit score of 620. Exceptions can be made to minimum credit score policies for borrowers with reasonable cause.FHA Credit Score Requirement Drops 60 PointsIt is getting easier for borrowers to get a FHA backed home loan. Major lenders will now approve 96.5 percent FHA mortgage applications for borrowers with FICO scores of 580. It marks a 60 point improvement over a few years ago, when FHA lenders required 640 FICO scores or better to get approved.The news comes when FHA loans are in demand. The program’s 3.5% down payment minimum is among the most lenient for today’s home buyers; and underwriting requirements on a FHA loan are flexible and forgiving. FHA loans account for close to one-quarter of all loans closed today.Minimum Credit Score To Get A FHA LoanThere are two minimum score levels for FHA, depending on down payment level.580 with 3.5% down500 with 10% downSome potential buyers have credit issues from their past. With a clean recent history, though, these buyers might achieve mortgage approval despite low scores. This is especially true after extenuating circumstances.These are events outside the applicant’s control. Sometimes, a lender can look past a layoff, one time medical event, or another isolated financial shock that wrecked your credit. A low credit score is not always reflective of the applicant’s credit-worthiness. In these cases, lenders can push through an approval for someone with a low credit score.Keep in mind, though, that lenders may impose higher minimum scores than FHA itself, sometimes as high as 620 to 640.FHA Loans With No FHA Credit ScoreFHA loans are even available to those who have no traditional credit history, that is those who have paid cash for everything and have never opened a credit card, auto loan, or mortgage. According to FHA, lenders must not automatically deny applicants with no credit. Rather, it should gather history for credit like accounts: utilities, cell phone bills, insurance payments, and even childcare expenses.Lenders can approve a loan built on non-traditional credit. A mortgage can be the applicant’s first ever real credit account.Getting A FHA Mortgage After BankruptcyDifferent rules apply according to what type of bankruptcy you went through. Here is the standard waiting periods for Chapter Seven bankruptcies:FHA loans: Two YearsVA home loans: Two YearsConventional mortgages: Four YearsUSDA home loans: Three YearsFHA Loan After A ForeclosureA foreclosure can certainly drag down your credit score. Fortunately, agencies tell lenders it is okay to lend to an applicant after a foreclosure, provided enough time has passed.FHA loans: Three yearsVA home loans: Two yearsConventional mortgages: Seven yearsUSDA home loans: Three yearsWaiting periods are reduced if the event was caused by circumstances beyond the borrower’s control.Minimum Credit Score For A Mortgage: FHA, VA, Conventional, USDAFHA might not be your only choice if you have a lower credit score. It is often the best option, but not the only one, especially if you are buying in a non-urban area or have served in the military.FHA Home Loan: A minimum 580 score is required for FHA applicants with a 3.5% down payment. If you have 10% down, you can get approved with a score down to 500. Keep in mind that some lenders will impose higher minimums.VA Home Loans: Most lenders require a 620 score, although the VA itself does not publish a minimum score.Conventional loans: These are backed by Fannie Mae and Freddie Mac and offered by most lenders in the country. A 620 minimum score is required, with some lenders requiring as high as 620–640 for conventional financing. For those with a small down payment, FHA loan is usually more cost effective.USDA Loans: A 640 score is required for a streamlined approval on a USDA loan. Lenders may approve lower credit scores, but documentation requirements are heavier. The USDA mortgage is available in certain geographical areas around the U.S.Can I Buy A Home With Low Credit?Lenders often look at the complete story, not just the credit score. This can work for or against you. Here are two situations that might play out in real life.Scenario 1: An applicant had a bankruptcy 18 months ago. He has a 660 credit score, high enough for a FHA loan. But, his waiting period is not up. He will not be approved.Scenario 2: An applicant has a 580 credit score due to an one time medical emergency which resulted in unpaid bills and a job loss. She had perfect credit and steady employment before and after the event. She could be approved. The score is not reflective of her true credit-worthiness.These situations play out every day across the country. Just because you have a low score does not mean you cannot be approved for a FHA loan or any other mortgage type.FHA Loans Allow 3.5% Down PaymentFHA loans are an important component of the U.S. housing and mortgage market. They are insured by the Federal Housing Administration and made available to U.S. buyers and existing homeowners. The agency was formed in 1934 and it exists to provide affordable housing to Americans. Today, it is the largest insurer of mortgage loans worldwide.The Federal Housing Administration does not actually make loans. Rather, it insures loans made by the national banks are providing protection against defaults and loss. To gain the FHA’s protection, lenders must only make sure that the loan in question meets the lending standards as set forth by the FHA.The FHA’s rule book is known as the FHA guidelines and it describes all allowable loan traits, as well as the going terms of a Federal Housing Administration backed loan. For example, FHA guidelines states that home-buyers must make a minimum down payment of 3.5 percent against a home’s purchase price; and that buyers can be cleared to buy a home 12 months after a bankruptcy, short sale, or foreclosure.Guidelines also place limits on the size of a FHA backed loan, which varies by county. In addition, FHA loan limits range from $275,665 for a single family home to $1,223,475 for a four unit home.
So I would want to find a mortgage broker who either had that experience themselves or who had clients that they had got similar deals for ’cause that way I know that they can negotiate on my behalf and they can get this deal across the line.
What details do Lenders need from me?
It’s one thing to call up a mortgage broker and just to get an estimate of your borrowing capacity but if you’re going through pre-approval and stuff like that, then you’re going to need to provide the mortgage broker with more in-depth details.
You might need pay slips; you might need proof of identity, all of that sort of stuff.
If you ask them up front, “What details do you need from me?” And when you go to your meeting with them you actually provide them with those details, well that just makes things so much easier.
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Remember, a mortgage lender is only paid once the deal goes through and once you actually get financing.
So the easier you make it for them, the more likely you are going to get better service.
What can I do as a client to make this go as smoothly as possible?
You have the goal of getting financed for your property, the mortgage lender has a goal of you getting financed for your property and no one wants it to be difficult.
And so, if you can ask the mortgage broker, “Look, how can I work with you? How can I make things easy for you?” They’re the experts; they know what they’re doing.
They can tell you exactly what they need and then you can work hard to provide that for them so that they can get everything across the line as quickly as possible.
You know, I have customers,I deal with customers and even though I’m not a mortgage broker myself, I know that when there’s difficult customers that you don’t want to deal with, it just makes life so much harder and you don’t want to work hard for those people.
And when there’s customers who are really nice to you and who try really hard to help you provide them with the service you provide, you will bend over backwards to do anything you can for those customers to get them across the line, to help them as much as possible.
So, be one of those customers that the mortgage broker wants to bend over backwards to help you because you have their interest at heart as well.
You want to see them get paid.
You want to see them do an easy mortgage so they get paid easily.
And so you can develop a relationship into the future.
Which lenders can I borrow the most from?
Most people go into a mortgage broker looking for the cheapest interest rate possible.
What is the cheapest interest rate I can get? And the fact of the matter is a mortgage broker is likely to show you the banks that will lend you the amount of money you need and will also have the cheapest interest rate as well.
However, they might not showy ou banks that will lend you more money than you potentially need at the moment.
Now, it’s important to ask, “Which lenders can I borrow the most from?” because this will help you to project into the future.
Maybe you don’t need to know that for this loan right now but maybe, in the future, you might need to borrow money again and you know, or roughly my borrowing capacity is this.
Or if you find out which lenders you can borrow more from, and you find that you can actually borrow an extra $300,000, well you might split up your deposit and invest in two investment properties instead of just one.
And so asking them, “Which lenders can I borrow the most from?” is a great question to ask to really understand your position.
Because, yes, interest rate is important but how much you can borrow is also important as well.
Can I see a full list of my borrowing options?
Most mortgage brokers will provide you with, usually, like a top three or sometimes only a top one.
And I always like to think, “Can I see a full list of my borrowing options?”Again, this is less to say you want to go through all of this in minute detail and see.
You’re probably going to still choose from one of the top three ones.
But you just want to see that they’re giving you the full amount of information.
And most mortgage brokers are good people but there are some dodgy mortgage brokers out there who are just trying to get the deal that gives them the biggest commission.
And so by asking to see a full list of what your borrowing options, you can then look at that and you can then assess, “Okay, well which loan do I think is going to be best for me?” rather than just taking the recommendation of the mortgage broker who may or may not be thinking about themselves.
So, again, most mortgage brokers are great people out there to help you but it’s always a good idea to get a full list of your borrowing options that are available.
Will this put a mark against my credit file?
And so this is when you’re trying to work out how much you’re going to borrow and stuff like that.
When you go into a bank and you try and find out how much you can borrow, often, the bank will do a credit check and this puts a mark against your credit file.
And what happens is if you have a lot of these marks against your credit file, even though it’s nothing bad, this can actually stop you getting a loan.
So, talk to your mortgage broker and when you’re looking at, “What can I borrow?”or your looking at getting pre-approval, just understand, “Will this put a mark against my credit file?” ‘Cause it’s not bad to have a couple or whatever.
But if you’re getting lots and lots of marks against your credit file, then that could be an issue.
So just make sure and you know when a mark’s being put against your credit file and when a mark isn’t being put against your credit file.
How soon can I revalue or borrow again?
So if you’re investing in a property to renovate it or to develop it or even if you’re investing in a property that’s potentially under market value, you want to know how quickly can you revalue that property so you can get equity and then hopefully draw equity out of the property to go ahead and invest again.
There are a lot of lenders out there who don’t allow you to revalue within a 12-month period.
So, speak to your mortgage broker about the lenders that will allow you to revalue faster.
And basically, this will give you an idea of how quickly you can revalue to consider going again.
You’re also going to want to ask them, “After I invest in this property, how soon can I borrow again or what do I need to do to put myself in a position to be able to borrow again and to purchase the next property?” Because hopefully, your goal isn’t just to purchase one property but to grow your property portfolio and to achieve that financial freedom and that financial security that you’re striving for.
Will My Loans be ‘cross-collateralised’?
Now, I have heard a lot of stories about investors whose loans have been cross-collateralised and it’s cause major problems when they’ve gone and sold their property because the bank shave been able to take that money and pay off debt.
And basically, you want to avoid this at all costs from what I hear.
And so, it’s good to ask your mortgage broker, “Will my loans be cross-collateralised in any way?” Generally going with the same lender for two loans does it by default, even though it doesn’t say they’re cross-collateralised.
So, it’s just something that you want to look at the fine print, you want to understand, “Are these cross-collateralised?” And if they are, try and avoid it, try and get loans that aren’t going to be cross-collateralised.
So there you have some questions to ask your mortgage broker next time you go and see a broker to find out how much you can borrow or get pre-approval or get financed for another property.
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You can see what high rental yield properties look like that are likely to generate a positive cash flow.
Did You Know – You Can Get Pre-Approved for a USDA Loan in St. Marys?
Hi everybody, your real estate expert, LanceMohr.
And in this series, I'm talking about how to buy a house.
Today, I'm going to talkabout how to pick a mortgage lender.
If you don't need financing, don't worry aboutwatching this video unless you just want more information.
Alright, so how to pick a lender.
First off, if you've already chosen a real estate agent, this is a good place to start.
You could also ask some friends and family members, co-workers, get an idea who theywould choose.
Now personally, I was in the mortgage banking industry for several yearsand I was a co-owner of a mortgage company.
There's three types of lenders out there;number one is your big bank, your Bank of America, Wells Fargo and then you have yourmortgage bankers and then you have your mortgage brokers.
Now I'm not a real big fan of thebig banks or credit unions for that matter.
I think there's a lot of credit unions thatare really good, don't get me wrong and I'm not saying that there is anything wrong withbig banks.
I'm not a fan of them and the reason is – the reason why I don't like big banksis because if you go into a bank like Bank of America or say a Wells Fargo, you are onlyusing their money.
So if you go in and you have a very unusual circumstance and maybeyou don't qualify for their loan, they're not going to tell you "you don't qualify forour loan, go somewhere else".
They're just going to say, "You don't qualify for a loan.
" Now you may go to a mortgage banker or a broker and qualify for theirs.
So that's the problem, they are very, very limited because they only lend their money.
If you are round, you're not going to be able to fit in their square hole.
So it's not areally good way.
Now if you do use a bank, if you say Bank of America which I'm not afan at all, I haven't had them close a transaction on time in years, if they even close it atall.
So I got to say that, the only bank I can say that about.
But let's say you go toa Wells Fargo or you go to a Bank of America, always try to use a local loan office or don'tuse someone out of state, because you've heard of the term, "out-of-state, out of mind","out of area, out of mind".
That's really how it is.
You want someone local that knowsthe local ways in Florida, and more specifically I'm in Florida, I'm in Tampa, so the cityyou live in.
So that would be my first personal recommendation and I know a lot of lendersout there might be getting mad if they're watching this right now, especially if theywork for Bank of America.
But that's my opinion, I've worked with a lot of credit unions whenI was in the lending business and certainly not all of them.
Credit unions, the good thingis they really care about their customer.
The problem is they don't really do a lotof training to their loan officers unfortunately.
And you know, a lot of times when you're goinginto and getting a loan with a bank or credit union, a lot of times the loan officer ison a salary plus bonuses, and you want someone who, if they don't get you a loan, they don'tget paid any money.
That's the best way you are going to get a loan.
So I am a big fanof bankers.
Now really the difference between a bankerand a broker, is a banker lends their own money and will underwrite the file, usuallyin-house.
They are also called correspondent lenders.
Now I've worked for bankers before,and if bankers just don't have a competitive program – let's say you go in and maybeyou are a veteran and they're not real competitive on VA loans, let's just say.
They will usuallyhave brokers that they work with as well as and they could do different things.
So theyare usually good.
Brokers, I've worked for brokers when I wasn't lending as well andit's the same thing, but the difference is brokers have access to dozens and dozens oflenders.
Don't get fooled by that.
Most brokers only have about 5 to 7 lenders they work withat any given time; they might have a lender for their conventional financing, they havea lender for their government financing, they have a lender for their jumbo finances.
So don't get caught up into all that.
But the difference between bankers and brokers,if they don't find a way to say yes, they don't get paid.
And a lot of time what peoplewill do, is they will go out and they will be picking say maybe three companies, andthey will call up for a rate quote.
But you really, when you are calling up for a ratequote, you need to ask very specific questions and you need to do it all on the same day.
Because you could call one institution on Tuesday and rates could have changed up ordown on Wednesday.
And then you need to call the same day, you need to give the same parametersfor each one of them, "So I'm calling, I want to get a loan amount of $200,000 and what'syour rate lock?" Now I'm not a big advocate of going around and doing rate shopping becauseat the end of the day, lenders all get their money from the same place at the same price.
If you call 10 lenders, probably nine of them are going to give you the same quote for themost part.
Now banks will generally be a little bit more in the interest rate, but less inthe fees because everything is in-house, where a broker, they get their pricing at wholesale.
So there you could usually be more competitive on the interest rates, but they are a littlehigher on closing costs because they have to sort of outsource it and get it underwrittenover here in the process and all that stuff.
So get the information and call them all up,talk to them, ask them again the question, why should I work with you, what makes youdifferent, what makes your company different.
Whatever you do, whatever they tell you, onceyou lock in the rate, get a rate lock.
You don't want to be on different pages and theytell you one interest rate and then all of the sudden, you show up at closing and it'sa completely different interest rate, maybe it's a quarter percent higher.
Because theseller doesn't really care about your loan, all they know is you have to close.
So getit in writing from the lender, I can't tell you how many people – when I used to bein lending, pretty much everybody that I worked with, I always put everything in writing.
No one ever asked me but I wanted it all in writing for the documentation.
So always askfor it in writing and really try to take the person who you feel is looking out for yourbest interest, because at the end of the day, you could have the best interest rate in theworld, but if you are on the wrong loan program, the interest rate is sort of irrelevant.
SoI hope this helps you.
Leave a comment, if you have any questions, if you have anythingto say, you work for Bank of America – please leave a comment because I think it's goingto be real nice, but it is what it is.
And if you like my videos, subscribe to my channel,give me a thumbs up.
I appreciate it.
I wish you the best of luck in buying a home.
Havea great day.
Mortgage Lenders - How to Choose the Right One For You
A question I hear quite a bit about the USDA Loan looks at collections. It's pretty common to hear "I have a few old collections, are they going to keep me from being able to get the Rural USDA Program."
It's always a good idea to know what is on your credit report and so it could be a good idea to head on over to annual credit report dot com and pick up a free copy. Then you can be sure that all the info on it is correct, if it isn't you can dispute it immediately.
Anytime you see a collection on your credit report you'll want to let your USDA Home Loan Representative know about them right away because certain types of collections can have a damaging impact on if your lending agency can get clear title. Which basically means that individual collection could end up as a lien on the property. Normally, simply paying off an old collection before you close will be okay. Just be sure to speak with your loan officer before paying off any old negative credit items, because it could work against you.
And any lien on title is required to be paid off before the USDA Loan can fund.
Now the Rural USDA Program relies on the lender to provide good quality loans and the USDA requirements say that the LENDER must make a decision if an open collection account would need to be paid at closing or before closing. In the current mortgage market, these rules will be different from lender to lender and will also change as time goes on as tougher regulations hold the specific loan agent responsible for their loan determinations.
Any time there is a collection on the credit report, be sure to provide a written letter explaining the what caused the collection and that those problems have been eliminated.