These five tips will help you find the right Beverly Hills mortgage broker to get your mortgage loan process started.
Find Your Credit Score in Shape
Some people are not eligible to purchase a home. You must meet income and credit requirements to ensure that mortgage companies can approve you to repay the loan.
Low credit scores indicate that you are not a risky borrower, and will result in a higher interest rate for your home loan. Your credit score will be higher and you will have more leverage to negotiate lower rates with potential Beverly Hills Mortgage brokers.
A general rule of thumb is that if your score is below 580 you will have difficulty qualifying for most types mortgages.
To improve your credit score you need to ensure that your credit reports are accurate. Your credit report can be obtained from Equifax, Experian, and TransUnion. Each bureau must provide you with a copy of your report at no cost once per 12 months.
Next, pay off any high-interest debts as soon as you can. By lowering your debt, you’ll improve your debt-to-income ratio.
You can also save money on your down payment by paying off your credit cards and recurring loan before you purchase a house.
Learn about the lending/brokerage landscape
It is important to understand the key players in the lending industry. These are the most popular types of home lender:
- Credit unions: These member owned financial institutions often offer attractive interest rates for shareholders. Many have relaxed membership restrictions so it is likely that you will be able to find one.
- Mortgage bankers are people who work for a particular financial institution to package loans for the bank’s underwriters.
- Correspondent lenders: These are local mortgage loan companies who have the resources to make your loan. However, they rely on a network of lenders such as Chase to sell your loan immediately.
- Savings and loans: While once the foundation of home lending, S&Ls can be a little difficult to find. These smaller financial institutions can be a great resource for those looking for community-oriented services.
- Mutual savings banks: A type of thrift institution similar to savings and loans, the mutual savings banks can be competitive and are often localized.
Verify that each mortgage broker you are considering is licensed in the state you live in.
Pre-Approved
A mortgage preapproval letter is a great way to get an advantage when you are looking at houses. This letter will show the seller that your loan is likely to be approved.
This is evidence that a Beverly Hills Mortgage Broker evaluated your finances to determine how much you can borrow and how much house you are able to afford.
Pre-approval now can save you time in the future. Beverly Hills Mortgage Brokers will have all the information necessary to process your loan when you are ready to make an offer.
You will need to give lenders financial information in order to be pre-approved. Here are the most common requirements of a lender:
- Social security numbers for you and your co-borrowers
- Information about bank, savings, checking and investment accounts
- Outstanding debt obligations include credit card, car loan or student loan balances.
- Two years of tax returns (W-2s, 1099s)
- Information about salary and employer
- Information on how much you can put down and where the money came from
You can get pre-approved by multiple lenders. You can then compare Loan Estimate forms of each lender to find the one that offers the best terms and rates.
Compare rates from different Mortgage Brokers
Find the best mortgage rates online. Remember that any rate quote you find online is only an estimate. To provide an accurate rate, a broker or lender will need to verify your credit and process your loan application. Once you are satisfied with the product, you can lock in.
After you have received several quotes, compare the costs and determine which one is most financially beneficial to you. You can leverage your research to get the best mortgage rates.
There are a handful of things that go into finding a mortgage broker who is trustworthy, such as choosing the lowest rate. However, this doesn’t mean that the rate is irrelevant. A low interest rate could save you thousands of dollars over the term of your loan.
Ask the right questions, and make sure to read all the fine print
Ask for referrals from family, friends or your agent to narrow your options, or read online reviews. After you have a list of names, it is time to start asking:
- What method do you prefer to communicate your thoughts with clients? Email, text, phone calls, or in person? What speed do you respond?
- What are your turnaround times for pre-approval, appraisal, and closing?
- What fees are charged by the lender at closing? (These fees may include application fees, points, commissions, appraisals, points, and loan origination points.
- Are you willing to waive these fees?
- What are the requirements for down payment?
Check with your broker or mortgage lender to see if discount points can be purchased to lower your rate. In exchange for a lower mortgage rate, points can be purchased.
If you intend to live in the house for a while, this might be a smart move.
The principal and interest payments on a mortgage don’t cover all the costs associated with buying a house. Ask your lender about other costs such as closing costs, points and loan origination fees. Ask for clarification if you are unsure about something.
Beverly Hills Mortgage Brokers require an “earnest cash” deposit in order to begin the loan process. Ask your Beverly Hills Mortgage Broker for details about the circumstances under which the earnest money cannot return. If the answer is unclear, continue shopping.
Pay attention to the fine print in your loan documents. These documents will detail the terms of your loan, including who is responsible for closing costs, which items are included and what are excluded, as well as the closing date, home inspection requirements, and any other important details.