Monday, 29 September 2008
This can be real confusing. I read most of this article from Kelly King of Adams Mortgage and I thought you would find it helpful:
“A broker provides the service of loan application and processing only. The significant
service of underwriting, closing and funding the loan is left up to the company they
mail the package to and who knows what service levels they are currently experiencing and what efficiency their mail room has.. Wired funds from the broker limit the timing of the closing and the service level of the closing packet is difficult as all services after processing are remote.
A large mortgage banker like Well Fargo, Countrywide, Citibank, etc. provides all the services, but generally speaking they “centralize” their services for the sake of profit, versus customer service. Generally, you will find them to be more conservative in their individual loan approach due to their servicing after the loan. They tighten the guidelines more than not on agency products so they will have a higher rate of loan payment history.
A correspondent lender offers the best of both worlds which is what Adams Mortgage and many local lenders are. They can offer varied programs and pricing like a broker because they do not deliver loans to “parent company” to service like the mortgage banker does. They offer the services of a large company such as underwriting, closing, funding the loan that the broker does not.. However, they offer more efficient and faster service. They also fund their loans from their own warehouse line in the form of a check.
In short, it is more important than ever to find reputable banks and brokers. Not only do you want good rates and terms, you want to be able to close the loan so you can buy a home. The lender needs to be solid in order to fund the proceeds. Nothing is worse than a lender who does not deliver. Choose local real estate agents who know the lenders. You will be happy that you did.
Monday, 15 September 2008
What impact will the Fannie Mae & Freddy Mac buyout have? Probably nothing but good will come out of it.
Immediately we are seeing lower interest rates. Today they dropped below 6%. We were quoted by Kevin Bent @ WR Starkey 5.75% on FHA & VA loans and 6% on conventional.
The buyout does affect down payment. Other than VA, all loans will require some down payment. FHA requires 3%, conventional loans will need at least 5%. On VA loans, you can get a zero down payment. Rates will be credit score driven. The better your score the better the rate and terms.
As a whole, the American government will feel some economic crunch. The money has to come from somewhere. However if lower rates can improve home sales, it will stimulate the economy enough to overturn any financial impact.
Hopefully this is the fuel we needed to get the housing market going again.