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Top 6 Reasons To Use A Mortgage Broker Vs Bank

6_reasons_you_should_use_a_mortgage_broker


1.more_financing_options

It's a question home buyers have been asking themselves since the dawn of modern finance: Should I go mortgage broker or bank? Banks have their place, but there's some distinct advantages to using a mortgage broker. Mortgage brokers have access to more home financing programs than an individual bank or mortgage lender. Because brokers have access to numerous banks/lenders, they can help all kinds of borrowers with various credit score levels, and offer more down-payment options and interest rate offers.

In short, a broker gives you more options.

Mortgage Broker OrlandoFor example, one bank may only provide FHA financing for borrowers with a minimum credit score of 640 versus another bank that requires a minimum of 580.  Using a competent mortgage broker increases your odds of qualifying for a mortgage and can expose you to many different financing options. This enables your broker to compare multiple bank loan programs and help you make the best decision for your financial needs.

2.drive_to_provide_better_service
Mortgage Company ReviewMortgage brokers’ commissions are paid by the bank after your transaction is completed. A reputable mortgage broker does not charge an application fee or deposits. Unlike large banks, a good mortgage broker typically handles no
more than 5-10 transactions per month which enables them to focus more time and effort on an individual loan transaction. A typical large bank/lender loan officer may handle 100 to 200 customers per month and are not involved with every step of your loan. This can provide a big difference in service as the bank employees’ pay is often not predicated on your loan actually closing. Mortgage brokers have a greater incentive to provide better personalized service as they are not paid by the bank unless your loan closes.

3.flexible_hours_not_bankers_hours
Mortgage Broker HoursUsing a local mortgage broker gives you the opportunity to meet the person originating your loan face to face. This helps build trust when making one of the most important financial decisions you will make. Most people shop for homes on the weekends and after hours. A good mortgage broker does not work Monday through Friday banker’s hours. They make themselves accessible in the evenings and weekends or whenever a client needs to meet.

4.lower_costs_and_lower_mortgage_rates
Mortgage brokers deal directly with the same banks that are available to you. One big difference is that they receive wholesale rates.

Orlando Mortgage RatesBecause brokers are not employees of the bank, the cost of acquisition is lower. Because the broker is securing the client and absorbing the upfront cost of originating the loan, it is
costing the bank less to acquire the loan and thus some of that savings is reflected in the lower interest rate offered through a broker. In short the bank’s origination cost is decreased. Retail banks are like big corporations, have a higher overhead and charge higher fees and rates to feed their bottom line.

5.faster_closing_time
Since the mortgage broker doesn’t get paid until your loan closes, they are likely able to expedite the processing of your loan to close it faster than any bank. Many times when a bank originates a loan it can move to many different employees creating both longer processing and underwriting times and interrupted communication with you. Often banks can take 30 to 60 days to close your loan while a mortgage broker can close your loan in as little as 21 days.
Orlando Mortgage Broker

6.accountability_and_compliance
Mortgage brokers are required to adhere to stricter and more regulated industry standards than bank employees. For instance, a mortgage broker is required to undergo vast federal background checks and be licensed by the department of financial regulation. However, bank employees are exempt from the same strict standards. They are not required to be licensed. Unlike a mortgage broker, banks can even hire loan officers with a prior felony.
Mortgage Broker Florida

6 Reasons You Should Use a Mortgage Broker

When it comes to getting a mortgage

you have more options than you think

How Much Mortgage Do I Qualify For?

The #1 question first time home buyers ask is: How much mortgage do I qualify for?

 

This is, by far, the wrong question to be asking.  They shouldn’t be basing their purchase price based on what mortgage they qualify for but instead, how much of a mortgage payment are they comfortable with paying every month.

For instance, they may qualify for a $2000.00 per month mortgage payment but that doesn’t mean they should be buying a house with payments that high.  Instead, they should be asking themselves what mortgage payment are they comfortable with paying every month so as not to be “House Poor”.  I usually advise married borrowers to base their mortgage payment based on one borrowers’ income, in the event the other borrower becomes temporarily unemployed.

The current Fannie Mae mortgage underwriting guidelines allow a borrower to obtain a mortgage payment up to 50% of their gross income.  Personally, I think that is crazy and here is why:

Assume you make $48,0000.00 annually.  That means the current guidelines will allow you to have a $2000.00 per month mortgage payment.  So let’s run the numbers and see why a $2000 mortgage payment would not work. If you make $48,000 annually, that breaks down to $4000 per month and after a minimum of 20% income tax, you will take home $3200.  So, use $3200 as your monthly bills starting point.

$3200

-$2000 – Mortgage

-$200 – Health Insurance

-$100 - Car Insurance

-$100 – Phone Bill

-$250 – Utilities (Power/Water/Sewer)

-$100 – Cable

-$200 – Auto Gas

_____________

$250 – left over for livable expenses (Savings, food, entertainment, etc.)

At $250 per month to live off of, you’ll own a big, beautiful home … that you can’t even afford to invite your friends over for the house warming party. Not my idea of a good time. Instead, go in to the home loan process with the idea of how much you want to pay per month. By doing this, you will be more effective in budgeting your money, thus being able to get a home you can afford to buy and comfortably enjoy living in.

The proper question to ask a mortgage company when thinking of buying a house is:

I would like my mortgage payment not to exceed “X” dollar amount per month.  What price range of a home should I consider buying?

For First Time Home Buyers, choosing the right mortgage broker or lender to work with is the key in successful homeownership. Your Loan Officer needs to take into account your short term and long-term goals and help you choose a mortgage payment that you are comfortable with rather than getting a big loan that benefits them only.

I pride myself with the integrity and experience that allows me to help my borrowers obtain a mortgage that best fits their needs and not my pocket.  Give me a call today and let me guide you through the proper home buying experience.

Experience, integrity and customer loyalty is how I’ve been serving Central Florida Homeowners since 2001. I help hundreds of homeowners every year by taking the time to look at their short and long-term goals. I help them customize a mortgage option that best fits their needs. As a consumer advocate and the Principal Broker at Florida Home Funding, my pledge to you is:

  • I work for you, not the banks
  • I put your best interests first
  • I work around your schedule, not banker’s hours
  • I give straightforward answers to all your questions
  • I have more financing options than any bank
  • With access to wholesale mortgage rates, I am confident that there is not a bank in town that can beat my rates

This is how I have maintained an “A+” rating with the Better Business Bureau and have some of the best online reviews. Don’t take my word for it, see for yourself.

Call me and let’s talk about to a mortgage that fits your lifestyle for you to comfortably enjoy for years to come…

When it comes to getting a mortgage

you have more options than you think

#1 Mistake When Searching 'Mortgage Rates Today'

#1 mistake when searching “Mortgage Rates Today”

The #1 mistake consumers make with the widely-searched term “mortgage rates today” is not knowing how to read the fine print and the multiple factors associated with determining accurate mortgage rates. The most deceptive advertised mortgage rates are either missing clear and conspicuous disclosures of the terms or have disclosures that require a very mortgage savvy person to understand.

For instance, some of the biggest online lenders advertise the lowest rate - but only based on very low loan-to-value and includes paying multiple discount points.  The fact is, most consumers don’t want to pay discount points. The cost associated with recuperating points with rates takes a long time to justify the benefits, and some people just don't have the money.  Another thing to consider is that mortgage rates today are subject to multiple criteria: Exact credit score, Loan amount, Loan-to-value, Purchase or refinance transaction, With and without cash out and Type of property.

Here are two categories of the type of companies that advertise mortgage rates to hook customers into completing an application (which eventually results in bait-and-switch tactics):

BIG Mortgage Lenders

The BIG online mortgage lenders with highly recognized names that sponsor the Superbowl and other major sporting events.  When it comes to lowest mortgage rates it’s not like a car dealership that gets better pricing based on volume. Pricing is purely based on overhead and cost of acquisition.  Often times, smaller mortgage brokers undercut these big lenders by a quarter to a half a percent when comparing same closing costs because they don’t have hundreds of employees or million-dollar advertising costs.

Lead generation websites with big brand names

These websites are very deceptive and unregulated since they are not licensed mortgage companies and will do anything to get consumers to complete a form.  They will advertise 15 year mortgage rates or adjustable mortgage rates with the idea that consumers assume it's a 30 year fixed rate without any discount points. The truth in lending act clearly sets out guidelines mortgage lenders are supposed to follow when advertising rates to consumers.  However, these lead generation websites have zero understanding of the law and have only one goal in mind:  get consumers to complete an application so they can sell your information over and over which will result in you getting slammed with telemarketers.

Do yourself a favor and instead of searching “mortgage rates today”, search for the best local mortgage companies, mortgage lenders or mortgage brokers. Interview them and read their reviews.  Each local market has hundreds of mortgage companies and so there's no reason to try and get a mortgage from an out of state lender that's just a call center full of highly motivated sales people.  Just think about this: Would you invest money with a financial adviser over the phone, or would you rather deal with a local person that you can meet with face to face?

It's your financial future at stake, your social security number and your identity that you're sharing. Make sure you know where your information is going and who you're giving it to.

I’m Shahram Sondi (NMLS id: 186790), principal broker and president of Florida Home Funding, a Florida licensed mortgage broker. As a consumer advocate, I am constantly working to educate consumers on making good financial decisions. I have been serving the Central Florida market with experience and integrity since 2001. Tell me what you’re looking for, and we will personally present you with the lowest available mortgage rate today based on your desired mortgage type and term.

When it comes to getting a mortgage

you have more options than you think

Who Is Eligible For A Mortgage?

While most people may think that everyone is at least eligible for a mortgage, this is not necessarily the case. Mortgages have eligibility guidelines, as well as, qualifying guidelines, both of which have different meanings. Many people may be eligible, but they may not qualify. Usually, documentation for proof of eligibility is always required at the beginning of the mortgage process for eligibility purposes.

Eligible Mortgage Borrowers:

  • Individuals with a valid social security number
  • Inter vivos revocable trusts
  • Illinois land trusts
  • Permanent resident aliens
  • Non-permanent resident aliens
  • Non-occupant co-borrowers

Ineligible Mortgage Borrowers:

  • Borrowers without social security numbers
  • Foreign nationals
  • Borrowers with diplomatic immunity
  • Land Trust, except Illinois
  • More than 4 borrowers per transaction

It is always a good idea to bring any proof of identity and eligibility, such as social security cards or permanent resident alien cards, when applying for a mortgage. These documents are needed for anyone who is an applicant for the mortgage. This will assure that the application can move to the next step, which is qualifying for the loan.

When it comes to getting a mortgage

you have more options than you think

Why Do Some Lenders Require Cash Reserves?

When it comes to mortgages, there are a lot of guidelines that must be followed, all of which must come together in order to receive an approval. For many borrowers, this information is new to them and can be overwhelming. For instance, most people know what a down payment is, but not many know about cash reserves and how much they need to fulfill this requirement.

Cash Reserves

Cash reserves are the amount of cash that a borrower is required to have available over and above the funds that are needed for the down payment, closing costs and prepaid expenses. Reserves, calculated using the note rate, equal the amount for principal, interest, taxes, insurance and any assessments.

Mortgages require cash reserves in order to make sure the borrower has enough funds available just in case an unexpected financial issue comes up or something that may affect the borrowers ability to make the monthly mortgage payment.

What can be considered reserves?

Reserves can include cash in checking or savings accounts or any other liquid asset that can be quickly converted to cash (liquid or near-liquid financial assets). Funds must be able to be readily accessed by withdrawing funds from an account, selling an asset, redeeming vested funds or obtaining a loan secured by the asset from a fund administrator or an insurance company.

How Much Is Needed in Cash Reserves?

Some mortgage lenders will require that at least two months of cash reserves be available. However, this determination is normally performed by Fannie Mae and Freddie Mac automated underwriting systems and may vary depending on the overall information pertaining to the mortgage.

When it comes to getting a mortgage

you have more options than you think

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    Sondi And Associates, Inc. dba Florida Home Funding. NMLS ID: 870878 Location: 390 N Orange Ave #2125, Orlando, FL 32801 | Phone: (407) 704-8729

    Content provided by The information provided on this site is for basic informational purposes only and IS NOT intended as a substitute for professional or legal advice. Notice: My Town Realty (License #: CQ1049127) and Florida Home Funding (NMLS ID: 870878) are both wholly-owned entities of Shahram Sondi (NMLS ID: 186790, License #: BK3225742). Due to this relationship, any referral between these two entities has the potential to financially benefit Shahram Sondi. Under no circumstance are you required to engage the services of one or both of these entities.