Buying Foreclosed Homes: Finding A Lender [mortgageapproved.blogspot.com]
Deputy Director of the National Economic Council, Brian Deese, answers a question about how the administration's plan will help people find a lender to refinance their mortgage.
mortgageapproved.blogspot.com White Board Window: Finding a Lender
Getting a mortgage when buying foreclosed homes is almost indispensable, especially if you do not possess unlimited cash resources that get you through big spending. Home buyers who plan to buy also inevitably plan for their financing. Getting a real estate loan has actually become more the norm rather than the exception for most people.
Aside from having a good credit, capacity to pay, and a history of being financially healthy, you should also know the different types of financing options available to you as a borrower. There is actually no hard and fast rule when it comes to obtaining mortgage loans. It all depends on what you need, your personal options and how you plan to pay the loan. The most common resources of mortgage loans are the following:
Mortgage Brokers
Mortgage brokers are the most common source of real estate loans and majority of those who have already purchased foreclosures got their loans through these brokers. Mortgage brokers are what you can call middle men between lenders and buyers. They have an extensive network of lenders, sometimes numbering to hundreds, to whom they refer buyers.
When buying foreclosed homes, mortgage brokers can operate as an upfront desk where they will ask a fee from you in exchange for shopping for the lowest interest rates and most flexible terms available for a mortgage loan. Be also aware that some mortgage lenders are paid either by the buyer or lender.
Mortgage Bankers
As the term connotes, mortgage bankers are people who work for a bank-lender. The loans that they facilitate are actually funded by the bank which acts as the lender. However, a mortgage banker does not necessarily work for a single banking institution only, but can actually work for a number of banks that provide home loans.
The important thing to remember about mortgage bankers is that the fees are often non-negotiable since they are fixed by the bank. You may also be limited to the type of loans that are only offered by the bank, which means that there is not much flexibility in the options. Lastly, not all mortgage bankers are licensed.
Commercial Banks
It is not actually the business of commercial banks to offer and facilitate mortgage loans. But commercial banks like Wells Fargo, Bank of America, and Citigroup do extend home loans to those buying foreclosed homes. The good thing about obtaining loans from these institutions is that they offer competitive terms and they could offer you further reductions in price and interest rates if you are already an existing client or are willing to maintain an account with them.
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