September 19th, 2016 7:03 AM by Jackie A. Graves, President
Choosing a mortgage broker might seem like a no-brainer if you
go with whoever quotes you the lowest rates and fees. On the surface, that
seems like a win-win strategy. But the lowest rates and fees can’t make up
for poor service or a lack of transparency.
To get the lowdown on how to cut through lending jargon so you
know exactly what you’re signing up for, we spoke to two veteran lending
experts for insights. Joe Parsons is a branch manager with Caliber Home Loans
in Dublin, California, and Kyle Kamrooz is co-founder and chief operating
officer of Cloudvirga, an online mortgage lending platform.
Here are four important questions you should ask when evaluating
With more lenders offering online platforms so you can track the
progress of your loan, the ambiguity around underwriting is slowly dissolving.
But not all mortgage
lenders are there yet,
Kamrooz says. Here’s what you’ll want to know about the process:
If this is your first foray into homebuying, or if you’re
refinancing, it’ll help to have someone by your side to make sense of the
complex underwriting process, Parsons says. Here are key things to know about
How you ask this question is crucial to getting the most
accurate loan pricing, Parsons says. Instead of wondering what the current mortgage rates are, ask for specifics.
An example: “I have a credit score above 700, and I want a
$300,000, 30-year, fixed-rate, conventional loan, and I have 20% saved for a
down payment. What are your rates today?”
Interest rates fluctuate daily, so you’d need to get mortgage
rate quotes all on the same day for an accurate comparison, Parsons
says. Using a mortgage broker who can do the comparison shopping for you
with a variety of lenders saves you time. The broker can find
apples-to-apples loan products and mortgage rates so you don’t have to do the
legwork yourself with multiple lenders.
If you know you have a low credit score or a less than stellar
credit history, you should be transparent with mortgage brokers from the start,
Kamrooz says. Doing so will help them find home loans that are best tailored to
your needs, especially if you’re a first-time
Federal Housing Administration loans, for example, are ideal for
borrowers with lower credit scores and minimal cash saved up for a down
payment, but you still need a score above 580 to qualify, Kamrooz says. Kamrooz
cautions that if you decide to go with a loan backed by the FHA or
the Department of Veterans Affairs, you’ll likely pay private mortgage
insurance if you have less than 20% for a down payment.
“Don’t feel defeated if you have a low score,” he says, “but
just know you’ll pay a premium for it.”
Ideally, you want to find a mortgage broker who offers
competitive rates, great service and strong support from start to finish. A
good mortgage broker will work with you to help you understand your credit
report and will give you advice on improving your credit score, choosing
the right loan, and ensuring that you have enough money left over for other
Even if you’re just beginning to think about buying or refinancing a
home, it’s wise to talk to a mortgage broker early on to learn how you can set
yourself up for success when the time comes.
By Deborah Kearns - To view the original article click here