Tips For Choosing A Lender

Tips For Choosing A Lender

Choosing a lender to work with can be overwhelming but here are a few tips to help you through the process.  Lenders play an important part in the real estate transaction and picking the right one is key.  You may have seen commercials, billboards or even internet ads but which lender is right for you.

Start by having choices, I strongly recommend you interview at least three lenders.  I have lenders I work with on a regular basis and recommend for many reasons.  The key is to know you are in control and have choices, pick the one who is right for you not necessarily the first call you make.

Ask about pricing, interests rates and costs.  This by far is a buyer’s main concern and while I agree it isn’t everything either.  Find out what you need to have as far as credit, down payment, closing costs and total out of pocket.  Ask about different loan options available to you under your situation.  Keep in mind someone who just got out of college may have different choices as opposed to a move up buyer with an established career know your options.

Are they available in the evenings and weekends?  This is extremely important as that is when real estate deals are done.  Most people are shopping when they are off of work and that is when your lender should also be available.  Traditionally lenders have been a nine to five business hour work week however in a competitive market we are in that has evolved to be available through out the week to stay competitive.  Availability is key so be sure to ask so you know you can be competitive in this market.

As you can see many there are several things to think about when choosing a lender to work with.  While television commercials might make you think it is something you choose down on your phone or on an app it really is much more involved than that.  The reality is you want to have someone who is available, gives you options, is transparent with their fees and has a good reputation of getting loans closed on time.

With a heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate.  I strongly feel an informed and educated consumer will make better decisions and be less likely to be taken advantage of.

Have questions about this or other topics, don not hesitate to contact me.

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Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

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5 Types Of Morgages

There are many ways to finance a home, let’s cover some of the more popular types of loan products.   Home financing options can get a bit confusing with all the terms and types of loans, each with their different requirements.  Let’s break down these different types of loans in a simple easy to understand format.  I will cover some of the more popular types of loans I see used to finance a primary residence.

Remember we won’t cover rent to own, owner finance, hard money loans and other types of financing.  While those types of financing options do exists it is generally is not very common.

These are just some of the basics for the different types of loans.

FHA - One of the most popular loans for low credit and down payment requirements

- Insured by the Federal Housing Administration

- Minimum down payment as low as 3.5%

- Minimum credit scores of 580

- 2 Mortgage Insurance Premiums

-Paid up front or financed in mortgage (1.75% of loan)

- Monthly Mortgage Insurance Premium (Based on several factors- .80-1.05%)

- This is probably one of the most popular due low to credit and down payment requirements.

Conventional - Offer better financing options however has stronger qualifying requirements

- Privately insured (not backed by government but private investors)

- Minimum down payment as low as 3-5%

- Higher credit score requirements than FHA

- Private Mortgage Insurance charged if less than 20% down payment

- Typically .5%-1% of the loan amount on an annual basis paid monthly

Ex: 100,000 loan - $1,000 per year - $83.33 per month

- Popular for those with higher credit & down payments

VA - Veteran requirement - low credit & even 0% down

- No mortgage insurance however it has a funding fee

- Funding Fee - ranges from 1.25%-3.3% (can be financed)

- Low credit score ok

- 0% down payment option available

USDA - 0% Down Payment Option

- Income eligibility 

- Property eligibility (www.usdapropertycheck.com)

- Credit Score low to middle 600’s

Jumbo Loans - Higher Price Point loan amount above conventional conforming loan limits

- Roughly $453,000 minimum loan

- Higher credit requirements - Middle 600’s & up - depending on down payment

- Higher interest due to higher risk loan

- Down Payment as low as 5% but typically higher

Keep in mind, we only covered the basics, we did not cover additional items such as:

• • • Debt to income ratios
    • Income requirements
    • Income Calculations
    • Self Employed vs Employed
    • Time on the job
    • Escrow options (Escrow or No Escrow)
    • Property Requirement - condition
    • Max Loan To Value %

As you can see there are different types of loans for different situations to suite you best.  From my experience these loan requirements can change on a regular basis and can be difficult to keep up with which I why I strongly recommend the loan officers that I work with.  They stay on top of these loans, are up to date and also know the ins and outs of loans to see which ones fit your need.  With so many variables to consider beyond credit and down payment I leave it up to the pros to assess your situation and present to you all your options. 

I hope this helped you breakdown the different loans and at least to know some more of the terms you hear all the time when it comes to mortgages.  If I can be of assistance or you have any further questions please do not hesitate to contact me.

 Again I hope this was of value and maybe you picked up a tip or two.  My goal is always to be a resource and educate my clients so they can make informed & educated decisions.

Have questions about this or other topics, don not hesitate to contact me.

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

Follow me on Facebook:

http://Facebook.com/MakeNorthTexasHome