These five people can make or break your mortgage: Yahoo Homes by Terence Loose Are you thinking about buying a house and getting a mortgage, but are unfamiliar with the process and the players involved? That could cost you, say experts. Ultimately, a successful mortgage application comes down to having an experienced professional team, and communication with all parties, making it clear to homebuyers what they need to do, or more importantly for the mortgage, what they shouldnt do, says Matt Metcalf, a real estate professional with Simply Denver Homes. Gloria Shulman, who is the founder of Centek Capital Group and has 30 years of experience as a Southern California mortgage broker, agrees. Buyers have more options than ever, and the key is understanding what is available for each individuals financial situation, she says. Shulman says if you want a role model to follow for your mortgage process, mimic that master of the follow up question: TVs iconic Detective Columbo. He was famous for asking Just one more question. You should too. And so should the professionals you hire. Questions are your friends, she insists. With that in mind, we asked the experts to identify the five professionals who are key to getting you the best deal on your mortgage. Heres an essential rundown on what each does and why theyre so important. Pro #1: The Realtor Key Roles: Helps you find the perfect home; your liaison to lender or mortgage broker; trouble-shooter. If you are in the market to buy a home, its likely that the first professional youll interact with is a realtor. But if you think that realtors merely escort you around town until you find your dream home, think again. Their role is more involved, and more important, than you might think when it comes to getting your mortgage. A realtor can make or break your mortgage on their own, so pick a good one, Metcalf says. He says this is because one of the most important things realtors do is match the right house with the right buyer. That includes making sure you can afford (i.e., qualify for a mortgage) the houses you tour, and making sure the homes themselves can qualify for the mortgage (more on that in the appraiser and inspector sections). Although a realtor cannot act as a mortgage broker, a good realtor can and should be an active liaison between you and your lender or mortgage broker, says Oliver Overton-Morgan, president of Absolut Realty in Orlando Florida. Sometimes mortgage brokers and lenders are overworked and understaffed, so having a realtor follow up with them regularly can keep your loan application at the top of their priority list, says Overton-Morgan. He says a realtor is often the person who is coordinating much of the information that needs to get to the mortgage broker - from the home inspection and appraisal to the contract with the seller - so they are an important element in making deadlines. Finally, says Judy McNary, a certified financial planner in Broomfield, Colorado, a good realtor can help you get pre-approved for a mortgage by introducing you to a good mortgage broker, who can then do a pre-approval before you start looking for your home. That way, she says, you can be very competitive with your offers because youll know how much home you can afford. Ways to Find a Realtor:* • Ask friends who recently bought a home; referrals are always best, and appreciated by realtors. • Online: There are many websites that grade realtors and have former customer feedback. Just make sure it is not paid advertising by the agent themselves. • Attend open houses on your own before having a realtor. After all, theres nothing like meeting someone in person to gauge whether or not they are a good match for you. Pro #2: The Mortgage Broker (aka: Originator or Loan Officer) Key Roles: Identifies best mortgage for you; puts together paperwork; makes sure all deadlines are met. Metcalf says that the mortgage broker or loan officer is the start of your mortgage process and a good one will identify the best loan for your needs, make sure you qualify, and will verify the information needed before it is sent to the lender for underwriting (see next section for more on that). A good broker, Metcalf says, will know the underwriting guidelines (like preferred credit scores, debt limits, savings needed, income to debt ratios, etc.) of various lenders, speak with underwriters and coordinate with your realtor to make sure all mortgage application deadlines are met. They also make sure any changes to the sales contract that could affect the loan are handled properly. They make or break a loan based on how they guide you when documenting credit, income and other financials to the underwriter, and helping you explain any questionable items, says Metcalf. Their knowledge and communication skills are critical to making sure you get the loan because there are many points that could kill the loan if they were mishandled. For instance, questionable items can be anything from that extra cash your aunt Betsy lent you for the down payment to a mistake on a credit report, he says. Ways to Find a Mortgage Broker:* • Ask your realtor; they can usually recommend a few they work with. • Online: Its okay to speak to a few to find one you trust. • Ask friends. Pro #3: The Underwriter (aka: Lender) Key Role: Makes the final decision to approve or deny your mortgage. In a nutshell, the underwriter at your chosen lender (bank, etc.) is the gatekeeper to loan approval and has the final say in whether you get your mortgage or not, says Metcalf. Thats a lot of power. But dont think you can get on his or her good side with homemade cookies - they prefer solid paperwork. Each lender has their own criteria for approving a loan. They will make sure they have completely qualified you and have every piece of documentation they need to fund the loan before sending the money to the closing agent, says Overton-Morgan. That documentation includes such items as your credit score and credit history, verification of your income and job status, the sales contract for the home youre buying, the homes appraisal and inspection, and much more. Metcalf adds that underwriters have guidelines they must follow, but within those are often large amounts of freedom to approve or deny loans. They can ask for the minimum or largest amount of documentation for a loan and based on how that information is presented they can approve or deny a loan for a variety of reasons, from your credit score to a miner problem with the property, he says. This is where having an experienced originator, who ensures that the documentation is presented properly, can make for a happy underwriter, says Metcalf. And cookies probably couldnt hurt. Ways to Find a Lender:* • Most people allow their mortgage broker to recommend a lender; it is part of their job to match you with the right lender. • Online: Lenders have their own brokers (loan officers) so you can go directly to them. Sometimes that can result in less expensive fees and possibly a lower interest rate. • Your bank likely has a loan department, and sometimes you can get a slightly better rate for being a longtime customer in good standing. Pro #4: The Appraiser Key Role: Assesses the value of the property to make sure its worth the sale (and mortgage) amount. Think of it this way: You may have found your dream house, but before the lender ponies up its cold hard cash to make your dream a reality, they want to know its worth what youve agreed to pay for it. So the appraiser (whom you pay for) will visit the property and complete an official valuation of it based on comparable properties in the surrounding community, market conditions, and their experience and training, says Overton-Morgan. Depending on how the property is appraised in relation to the sale price, your application could be denied. As a result, It makes sense [for the buyer] to spend a few hundred dollars to get an appraisal before making an offer so you know whether there will be difficulty obtaining the needed mortgage on a property, says McNary. She says that in many parts of the country appraisals are lagging behind rapidly rising real estate prices, resulting in mortgages not going through. You dont want that to happen to you, so McNary says its important to have an appraiser who knows the area well. Ways to Find an Appraiser:* • Often, lenders require certain appraisers. • If not dictated by the lender, homebuyers can get this person through the recommendation of their realtor or mortgage broker. Pro #5: The Inspector: Key Role: Assesses the condition of the property; identifies problems and potential problems; makes suggestions for needed repairs. The inspector goes over the home you want to buy - and mortgage - and prepares a written report of its conditions and any current or potential issues that may need to be addressed, says McNary. A copy of this report goes to you and the lender. And while it might seem fairly innocuous, big things can happen from seemingly small issues, McNary says. Items like a crack in the pool or uneven steps can sometimes blow up the entire mortgage application, she says. That may seem extreme, but consider the lenders point of view, says Overton-Morgan. The lender is lending their money and their collateral is the house. Therefore, they want to make sure their collateral is in good condition. He says that this is the reason that if there are any issues found, they should be taken care of immediately. This is where your realtor comes back in, he says. He or she needs to negotiate with the seller to see if they will repair the issue, or reduce the price of the home to cover your repair cost. That may save the deal, and the mortgage. Ways to Find an Inspector:* • Most people find a home inspector through their realtor or mortgage broker. • It is advised that you do not allow the seller or their agents to recommend an inspector. Okay, now that you know your team, you can have a nice, happy house hunt.
Posted on: Thu, 24 Jul 2014 16:44:40 +0000
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