The first thing that comes to the first time homebuyer's mind that wants to buy is that they should get a real estate agent. If you are a first-timer, a knowledgeable agent will advise you that the first thing to the home buying process is to get prequalified for a mortgage before searching for a home. The agent will often know a loan officer of a mortgage broker that will assist you. The prequalification will then let the real estate agent know the price range the agent should search for a house for you to qualify for a mortgage. Without guidance, you may think that you should go to your bank. The bank will make an inquiry on your credit only to find out you don't qualify for much of a loan amount, or in most instances, the bank denies the loan. A credit inquiry by the bank could reduce your credit score and hinder chances you would have had with a mortgage company to get approved for a mortgage.
A banks reputation is base on being secure, so they try to take the least amount of risk in lending the bank's money. Thus, bank loans on strict conditions that most people will not be able to qualify. For instance, a borrower's income must be exceedingly more than their current monthly debt added with their future monthly obligation of the loan amount to be eligible for a mortgage. The bank also will have to pull your credit report to analyze it for creditworthiness. The credits on your credit report have to be without blemish, or you will be forever waiting for approval.
Experience homebuyers usually go to a mortgage broker to get their mortgage even though the mortgage broker loan fees for initiating the loan maybe a little more than the banks. However, the mortgage broker will advise you on how to qualify to fit in a loan program that is available that fits your needs. The loan officer will also notify you how to resolve credit issues to position you for the loan. You may pay a little more in one-time loan fees, but you get more. Mortgage Company's specialty is taking real estate secured risk. Therefore, they have loan programs to fit various situations or issues that real estate buyers have.
The following are a sample of multiple liberal conditions a mortgage broker loan program can accommodate 1. they can lend to someone self-employed by using 12-months bank statements, 2. to persons one day out of short sale or foreclosure with a 580 FICO score and 20 percent down, 3. There is no need to divulge personal income for an investment property, 4. three percent down of the value of property and seller can pay all of the closing cost. The loan programs for luxury homes purchase and investment properties may subject similar creativity as well.
A big benefit with a mortgage company that they can pull one credit report for you and use it to qualify under many loan programs with several lenders. This will save you money, time, and credit inquiry that affects your score. If you go to a bank and get rejected, then you will end up going to a mortgage broker regardless if you still want to buy a house.