Need a Mortgage Lender for your White Mountains Arizona Real Estate Purchase?
Purchasing a new home, a second home or vacation home in the White Mountains of AZ is a happy thing—or it SHOULD BE! Bruce & Pam Wachter with West USA Realty in the White Mountains of Arizona are experienced real estate brokers and agents—and we can guide you as you navigate one of the most important aspects of your transaction—the loan process.
Securing a loan, even looking for lending lines, can be confusing, especially in the beginning, but knowing some of the options and the differences between them is an important first step. The first item on your list should be to select a lender. We can help you select a lender that you can trust. Over the many years we’ve come to know several lenders, loan officers, mortgage brokers, who will work diligently to find the best loan product for your specific needs.
Over the years, we’ve found that many buyers are confused about their options, and we’ll attempt to answer some of those questions about loans and lenders.
What's the difference between a Bank and Mortgage Broker?
Buyers may work with an officer at a bank or other lending institution, or decide to work with a mortgage broker. While the end result is the same - a home loan - there are differences between a mortgage broker and loan officer.
Bank Loan Officers
Loan officers at a bank, a credit union, or lending institution are employees of the firm whose job it is to “sell” mortgages and other loan products that have been formulated by their institution. Often they have a variety of loans types to draw from, but all loan structures originate from the lender they work for.
The loan officer reviews your application and works to find a loan product available at his or her lending institution that best fits your particular situation. If your credit is approved, the officer moves forward to process the home purchase transaction.
A mortgage broker is a company that originates loans, joining the borrower and lender lines for a real estate loan transaction and earning a placement fee.
Working with dozens, maybe even hundreds of lender sources as “freelance” agents. They acquire and evaluate buyers, analyzing each buyer(s) credit situation, and then determine which lender best fits those lending situations. The broker submits the home buyer's application to one or more lenders, and then works with the selected lender through the loan closing. Most usually, a competent and experienced mortgage broker can find a lender for virtually any type of credit situation.
What Difference Does it Make?
Maybe none, but maybe a great deal. There are differences between the two iptions. A local or online mortgage broker may be able to find you the best rates and loan amounts because of his/her greater access to lending lines, where a bank may limit buyers only to specific programs or loan rates. While it may be true that a bank may offer some incentives to buyers via one or another loan product, a mortgage broker can also usually find a lender who will make loans that a bank might refuse, such as problem credit situations.
But, a bank may be more accessible to you. Your loan is originated from that specific institution, not sold to a lender who may be located in another state. You may also benefit by removing the "middle man" (a broker).
Make your choice of a lender based on the best loan terms you can find, including rates, closing costs, and the transaction's time-frame. Bruce and Pam Wachter are happy to make referrals to loan officers and brokers with whom you can speak and investigate the best loan product. Just ask. Sometimes buyers have great loyalty to a loan officer or broker, and that’s a nice thing; however, there may be better options by leaving your comfort zone. After all, you’re considering a financial instrument. Do not hesitate to get more than one quote. There is no one solution; every buyer's loan needs are different and every lender has something different to offer.
How to find a lender?
When purchasing your home you are going to want to work with a trusted lender. You need to work with a lending source with a proven track record. Feel free to ask Bruce & Pam Wachter for referrals, ask close friends, too.
Pre-Approval and a Pre-Qualification
Nowadays, all offers on real estate which purchase will be financed, requires a pre-qualification . It is a preliminary step to financing pre-approval. A loan officer will indicate the maximum loan amount for which you may qualify, based on the information you supply about income, assets and credit standing. This does not represent a loan commitment or pre-approval. This is more of an estimate based on what you’ve told the lender.
A pre-approval is when your lender actually pulls your credit history and has you fill out a loan application. You will be asked about employment, income, assets/savings and monthly debts/liabilities.
Once approved, you can look for appropriate homes with confidence. A pre-approval is only valid for a short period of time, but can be extended.
A pre-approval also makes your offer to a seller much more attractive than a pre-qualification.
You will need to provide information regarding your income, expenses and any financial obligations. The most common items you will need to supply include the following; but, as each buyer’s situation may be different, one from the other, there may be other items requested by the lender:
"What the heck is this??" - What to do if you notice mistakes on your Credit Report?
Many credit reports accumulate errors over time and sometimes these errors can lead to a denial of credit. It is extremely important to review your credit report and fix any incorrect information as they are discovered by you.
A Consumer Reporting Agency (CRA), or credit bureau, compiles and sells your credit report to businesses. This information is utilized to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA).
Simple mistakes are easily corrected by writing to the reporting company, pointing out the error, and providing proof of the mistake.
The three major national credit bureaus are:
If I've had a bankruptcy or have bad credit, can I still purchase a home?
Fortunately, in those instances, there are always options. A bankruptcy can make getting approved for a mortgage loan more difficult, but it is still possible. Your lender will look closely at your income, down payment and payment history since bankruptcy.
Contact Bruce & Pam Wachter, REALTORS, to guide you through the loan approval process, or to point you to the right resources to give you advice and assistance on how to help repair your credit.
The “Good Faith Estimate” – how it helps you decide
A Good Faith Estimate is an estimate that lists all fees paid before closing, all closing costs, and any escrow costs you will encounter when purchasing a home. The lender must supply it within three days of your application. This is very important so that you can make judgments when shopping for a loan.
What should you do when you are pre-approved?
Call Bruce & Pam Wachter with West USA Realty in the heart of the White Mountains of Arizona! Next to your pre-approval or strong pre-qualification, working with Bruce & Pam Wachter maximizes your ability to be successful in buying the perfect home, vacation or second home in the White Mountains of Arizona!