LENDER LIST

MORTGAGE BROKERS:

Finding a Lender and Obtaining a Loan

STEP ONE: Understanding your Lending Options

Unless you plan on buying a house with all cash, finding out what kind of loan you will qualify for is definitely the best first step to buying a home.There are many different ways to obtain a loan to buy a new house.There are banks that have loan officers to finance loans through that particular bank, mortgage brokers who will search a number of lenders to find you the right loan then administrate the loan for you, and then there are several different private and federal programs that address the needs of particular buyers. Attached is a list of lenders, mortgage brokers, and programs.I have worked with many of these lenders and have been very pleased with their customer service and loan programs.

The most common approach to obtaining a loan is to go through a mortgage broker or a loan officer at a bank.Mortgage Brokers can do the searching for you to find the best loan at the best rate for your situation.A broker should be able to tell you various loan programs and give you an idea of what will work best for you.Brokers are usually able to get your loan process started much faster than some of the various credit unions, organizations, and agencies that also help you apply for loans. Brokers will have access to most loan programs that you may have heard about, so feel free to ask them questions about any type of mortgage.Most brokers and banks will be able to access both conventional and FHA programs, and low down payment and zero down payment programs.

Some of the special loan programs and credit union programs designed for "first time home buyers" and "low to median incomes" or "homes in need of repair" may have strict standards for qualification and lengthier loan processes due to waiting lists and longer processing schedules.The loan officers for these programs will help you figure out if you qualify.Keep in mind, however, that special programs will tend to make the transaction more complicated than a conventional loan.The time involved in obtaining and qualifying for these loans may delay your home buying process, and the strict qualifications for the borrower and the property may limit your property choices.

Whichever mortgage broker or loan officer you choose will guide you through the loan process from loan application to closing.Choose carefully! It's best to find someone that comes highly recommended by a trusted friend, family member, or your Realtor.You don't want to have one of the biggest purchases of your life handled by someone you found on the internet without assurance from a trusted source that that particular person consistently does a great job.The lender with the best rates is not necessarily the best lender for you.A bad lender can ultimately cost you a lot more in foul-ups and delays and even cost you the house of your dreams if they aren't experienced and excellent at what they do.Processing a loan takes many steps and you want a mortgage broker or loan officer that will give you highly personalized and professional service.This is rarely found in an internet lender who you've never even met.

STEP TWO: Interviewing and Choosing a Lender

All of these lenders should be able to give you an estimate of your borrowing power over the phone with a little info about your income and debts.If you have a general idea of your credit rating, you don't need to give out your Social Security number or have credit reports pulled until you have decided which lender to work with.It's a good idea to call or email several different lenders and choose the one that gives you the best rates, the best program, and, equally as important, the one with whom you feel most comfortable.You work very closely with the lender throughout the home buying process, so it's very important to have a lender who is entirely dedicated to excellent customer service.Please use the questions on the last page to help you find a good lender.

STEP THREE: Obtaining Good Faith Estimates

It's best to ask each lender you talk to for a GOOD FAITH ESTIMATE (GFE) in writing.A GFE will show you how much a home will cost you given your particular loan program and the current interest rates.Do not work with a lender who can't quickly provide you with a GFE.It will tell you how much cash you will need for your closing costs and down payment, and also how much your monthly "PITI" will cost for the life of your loan.PITI is your mortgage payment.PITI stands for Principal, Interest, Taxes, and Insurance.The lender will usually require that you pay all of these expenses together each month, thus the lender will estimate how much your insurance will cost and how much you may have to pay in taxes to give you an estimate of your possible PITI.Once you have several GFE's you may compare the various programs, rates, and costs from different lenders.The GFE, along with your idea of which loan officer will give you the best customer service, should determine which lender you choose.

STEP FOUR: Loan Application and Pre-Qualification

Once you have several GFE estimates to compare and you have chosen the lender you want to work with, you will start the loan application process.Make an appointment with the lender you have chosen to make loan application.The lender will tell you what they need you to bring to the meeting in order to complete this process.A lender will probably ask you to bring pertinent documents such as recent pay stubs, W-2's, savings statements, current rental information, property tax statements, and homeowners or renters insurance information.A lender should be able to give you a Pre-Qualification letter at this point.A pre-qualification letter states that you fit into the guidelines of a particular loan program for a certain purchase price, but that your application has not yet been approved.Pre-Qualification letters are helpful if you want to make an offer on a house, but what a seller will usually want from you is a Pre-Approval letter which states that you have been approved to borrow a certain amount of money for purchasing a home.

STEP FIVE: Obtaining Pre-Approval

Once you've finished your loan application then you wait for your pre-approval from the lender.The lender must verify your income, debts, and credit rating, and then process the application with the bank that offers your loan program.This should take from 1 hour to 3 days depending on your lender.If you make an offer on a house, it will always be a stronger offer if you have a pre-approval letter to accompany the offer.The letter shows the seller that you will be able to obtain the loan to purchase their house.Most sellers will not accept an offer if not accompanied by a pre-approval letter.

STEP SIX: Finding your home!

Now that you have your pre-approval letter in hand we are ready to go out there and find you a home!You will be ready to write your strongest offer as soon as you find the right property.You will want to contact your lender as soon as you find the right property so that they can fax you a new pre-approval letter for the exact amount that you want to offer for the house.You don't want to show the seller your top pre-approval amount in case you are approved for more than you want to pay.This is when it is very helpful to have a lender that can assist you on evenings and weekends.

STEP SEVEN: Appraisal and Conditions for Funding

Once you have an accepted offer, the lender will do an appraisal to make sure that the property is a good investment for the lender.The appraisal is included in your closing costs and you should receive a copy after you close.If there are any problems with the property, the lender may require that certain repairs be taken care of before closing.These repairs will be "conditions for funding" and the buyer and seller will negotiate who has to pay for the work.

STEP EIGHT: Final Loan Approval

As you near closing, the bank will once again verify your income, do a credit check, and verify savings, etc.You may need to supply additional documents at this time.

STEP NINE: Signing, Funding, Recording, and Closing

Finally, your loan documents will be sent to a neutral escrow company to be signed."SIGNING" is when you actually go to the title company to sign loan documents and hand over your cashier's check for the amount of the down payment and closing costs.Once you have signed the documents, it will take 24 to 48 hours for the escrow company to send them back to the lender and get approval.The client has nothing to do after signing except wait for the banks to fund, record, and close the transaction.  Once they have the final OK from the bank, the escrow company will release your money to the seller and the commission checks to the agents.This is called "FUNDING". At last, but certainly not least, the escrow officer will "RECORD" a new deed with the county stating that the property now belongs to you.Once recorded, the transaction is officially "CLOSED".I will hand over your keys, and the house belongs to you!

CONGRATULATIONS!!

 

Important questions to ask your potential lenders:

About the lender:

• Can I get references?
• How long have you been in business?
• How are you compensated?
• How do you handle rate locks?

About the loan program:

• Will you please email/fax/mail me a Good Faith Estimate in writing?
• What is the interest rate?What is the principal and interest payment?
• What is the estimated PITI (full monthly payment)?
• Is this one loan, or is there a second loan?What are the fees on the second loan?Are those included in the Good Faith Estimate?How much can these fees vary?
• Is this a fixed rate or an adjustable rate (ARM) or a balloon payment?
• Will my interest and principal payment always remain the same?
• Will there be a balloon payment?When?
• Why would I want a balloon payment instead of an ARM or fixed rate?
• Is there Private Mortgage Insurance (PMI) on this loan?Why?How and when can I get rid of it?
• What are points?Do I have to pay them?Why would I want to pay them?
• Are there any fees that can be reduced?
• Will I get a copy of my appraisal and credit report?
• How long will it take to process my loan?How long will the appraisal process take?
• Are there any fees that are not on the GFE that I should be aware of?