What questions should I ask a mortgage lender in Mount Vernon ? If you’re dealing with a mortgage broker there’s some questions that you should ask both on your first meeting with the mortgage broker and throughout working with your mortgage broker to make sure that you’re getting the best service possible.
USDALoanInfoNewYork is going to go through 10 different questions that you can ask your mortgage lender in Mount Vernon. Be aware that your USDA Loan or Mortgage broker will be getting the loan that you need and the service that you want.
The first question that I think everyone should ask a mortgage broker is a pretty straightforward one.
How Much Will a Mortgage Broker Cost?
Most mortgage lenders in Mount Vernon actually work for free.
So it doesn’t actually cost you anything in order to do it.
They get money because they are paid by the banks when you successfully get a loan.
So they get a small commission of the loan that you apply for and if you get it.
How To Pick A Mortgage Lender When Buying A House
So most mortgage brokers in Mount Vernon will work for free and it won’t cost you anything.
However, there are some mortgage brokers out there who do require deposits or who do require you to pay.
So, it’s important to ask, “How much will this cost me?” when assessing which mortgage broker you want to go with.
How much do Mortgage Lenders earn in commission from me and from my loan?
This is less to understand exactly how much they make.
You can see what percentage of commissions they make and things like that by visiting USDALoanInfo.
But it’s more to understand whether or not they’ll be willing to give you this information.
A transparent mortgage broker is someone that’d be willing to give you this information and you know that they have your best interest at heart.
First Time Home Buyer BEST MORTGAGE DEALS When Buying a House | First Time Home Buyer Loan Programs
If they skirt around this issue and they don’t tell you how much they earn.
Well then that would send out red flags for me because I can’t trust them to put my best interest at heart because there are some circumstances where one loan will earn them more money than a loan that could potentially be better for me but not as good for them.
So, I’m just trying to establish whether or not this mortgage broker in Mount Vernon is someone that I can trust.
And by asking them the big question, the money question,”How much will you earn from me?” That’s a great way to understand whether or not you can trust the mortgage lender.
So ask that question and see how they respond.
Do Mortgage Lenders Invest Themselves?
Now, I don’t think a mortgage broker has to be a property investor in order for them to be able to get you a good loan and for them to help you successfully invest in property.
However, if they are interested in property in Mount Vernon, if they do invest themselves, then that is going to go a long way to help you because they understand what it’s like to be in your shoes.
They understand what you’re trying to get out of this and they’ve done it themselves so they can help you miss some of the pitfalls and things like that.
If they don’t invest themselves, then I would want to ask them, “Have you worked with many people that invest in property?” Because as mortgage brokers, some of them just work with people who are buying their own home.
Choosing a Mortgage Lender That's Right for You
Some of the mortgage lender folk who work with people who are doing particular investment strategies.
So, some might work with people who invest in positive cash flow property or who invest in rural areas, who invest using developments.
Congratulations, on your decision to start the process of finding home lender. Now that you have made this life changing decision how do you differentiate between a good mortgage lender and a bad mortgage lender? To answer that question, first you will need to know what the qualities are in a good mortgage provider. Below is a list of things that you might find in a good accredited home lender:
a) They will provide information on the widest choice of options and terms available for your specific needs.
b) Your mortgage lender will serve as a personal guide in the mortgage marketplace.
c) They will counsel the homebuyer on the available financial alternatives.
d) A great lender will become creative to finding you solutions upon the unavailability of a traditional bank mortgage.
e) They will deal on your behalf with all other potential lenders.
f) A good home lender will then arrange for a mortgage loan that is best suited for your needs.
g) They will also arrange for the best rates for the home mortgage loan that you have chosen.
With that information, it is easier to search for a good sincere and honest mortgage lender. But, not stopping at that list of qualifications there're some extra things that will add to the list of benefits. Another advantage is that with certain types of loans a mortgage company may act as a mortgage lender, on others, it may simply play the role of a broker. A Mortgage lender may also operate from different locations, at certain times, they prove to be more beneficial than your local lender. Since the Internet has become everyone's favorite informational portal, lenders no longer operate within their own territories; instead, a nationwide service is what they look forward to. Providing future customers with more options, as that particular lender is well resourced.
Not stopping, there a good home lender does more than just going for the best loan rates available for their future homebuyer. For instance, if you were self-employed, you might not qualify for a traditional bank mortgage, for whatever the reason might be. Sometimes it might not be a fault of your own, but the financing bank is just unwilling to finance the home loan, because they think it will be a risk to their institution. This is where the home lender will step in, and act as liaison, or as a consultant if a cash-back, or a second mortgage is the requirement.
Here's a little bit of information on the different types of mortgage lenders, and providers:
I. Hard moneylender: They are known for short-term mortgages and in most cases offers worse rates than a traditional banking organization.
II. Traditional Mortgage Providers: Banking organizations and licensed mortgage dealers, operating both online and offline.
As stated earlier in the article a mortgage provider also works as a broker at times, it's important for the future homebuyer to know what will be covered within the brokerage service.
Apart from chalking effective marketing plans to attract future homebuyers, a mortgage provider also does the assessment of the borrowers circumstances including assessment of credit history, verifies affordability through documentation or alternative processes, and assesses the market to find a suitable mortgage loan fitting the future homebuyers requirements. Which will also help if the mortgage provider has to act as a liaison on your behalf.
Finally, an accredited home lender must take into consideration the affiliation from the top wholesale institutions, namely, Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage (Freddie Mac). Mortgage loans given out by an accredited home lender must comply with their jointly derived standard application form guidelines. This enables a home lender to become an eligible seller for the wholesale institutions and offer a larger scale of services to their future homebuyers, or investors. Packaging mortgage portfolios in the conformity that occurs with the secondary market does this. The agreement maintains the ability for the mortgage lender to sell mortgage loans for cash, so that if there's a drop in the interest rates and the portfolio features a higher average interest rate, it can be sold through a banker for a larger profit.
Now the next big question: When should you start looking for a mortgage lender?
To simply put it, when you feel that you're ready to take the steps to mortgage a property, and pursue ahead to get a mortgage loan that will make your life dreams a reality. To be honest no one can determine that for you, only you will know when you are financially, emotionally, mentally, and everything else that comes along with the "ally's" when you will be ready.
Good Luck on find the right accredited home lender. I hope that they will be able to assist you in purchasing the home of your dreams!
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So I would want to find a mortgage broker who either had that experience themselves or who had clients that they had got similar deals for ’cause that way I know that they can negotiate on my behalf and they can get this deal across the line.
What details do Lenders need from me?
It’s one thing to call up a mortgage broker and just to get an estimate of your borrowing capacity but if you’re going through pre-approval and stuff like that, then you’re going to need to provide the mortgage broker with more in-depth details.
You might need pay slips; you might need proof of identity, all of that sort of stuff.
If you ask them up front, “What details do you need from me?” And when you go to your meeting with them you actually provide them with those details, well that just makes things so much easier.
Alternative Commercial Mortgage Lenders - Hedge Funds & Private Equity
Remember, a mortgage lender is only paid once the deal goes through and once you actually get financing.
So the easier you make it for them, the more likely you are going to get better service.
What can I do as a client to make this go as smoothly as possible?
You have the goal of getting financed for your property, the mortgage lender has a goal of you getting financed for your property and no one wants it to be difficult.
And so, if you can ask the mortgage broker, “Look, how can I work with you? How can I make things easy for you?” They’re the experts; they know what they’re doing.
They can tell you exactly what they need and then you can work hard to provide that for them so that they can get everything across the line as quickly as possible.
You know, I have customers,I deal with customers and even though I’m not a mortgage broker myself, I know that when there’s difficult customers that you don’t want to deal with, it just makes life so much harder and you don’t want to work hard for those people.
And when there’s customers who are really nice to you and who try really hard to help you provide them with the service you provide, you will bend over backwards to do anything you can for those customers to get them across the line, to help them as much as possible.
So, be one of those customers that the mortgage broker wants to bend over backwards to help you because you have their interest at heart as well.
You want to see them get paid.
You want to see them do an easy mortgage so they get paid easily.
And so you can develop a relationship into the future.
Which lenders can I borrow the most from?
Most people go into a mortgage broker looking for the cheapest interest rate possible.
What is the cheapest interest rate I can get? And the fact of the matter is a mortgage broker is likely to show you the banks that will lend you the amount of money you need and will also have the cheapest interest rate as well.
However, they might not showy ou banks that will lend you more money than you potentially need at the moment.
Now, it’s important to ask, “Which lenders can I borrow the most from?” because this will help you to project into the future.
Maybe you don’t need to know that for this loan right now but maybe, in the future, you might need to borrow money again and you know, or roughly my borrowing capacity is this.
Or if you find out which lenders you can borrow more from, and you find that you can actually borrow an extra $300,000, well you might split up your deposit and invest in two investment properties instead of just one.
And so asking them, “Which lenders can I borrow the most from?” is a great question to ask to really understand your position.
Because, yes, interest rate is important but how much you can borrow is also important as well.
Can I see a full list of my borrowing options?
Most mortgage brokers will provide you with, usually, like a top three or sometimes only a top one.
And I always like to think, “Can I see a full list of my borrowing options?”Again, this is less to say you want to go through all of this in minute detail and see.
You’re probably going to still choose from one of the top three ones.
But you just want to see that they’re giving you the full amount of information.
And most mortgage brokers are good people but there are some dodgy mortgage brokers out there who are just trying to get the deal that gives them the biggest commission.
And so by asking to see a full list of what your borrowing options, you can then look at that and you can then assess, “Okay, well which loan do I think is going to be best for me?” rather than just taking the recommendation of the mortgage broker who may or may not be thinking about themselves.
So, again, most mortgage brokers are great people out there to help you but it’s always a good idea to get a full list of your borrowing options that are available.
Will this put a mark against my credit file?
And so this is when you’re trying to work out how much you’re going to borrow and stuff like that.
When you go into a bank and you try and find out how much you can borrow, often, the bank will do a credit check and this puts a mark against your credit file.
And what happens is if you have a lot of these marks against your credit file, even though it’s nothing bad, this can actually stop you getting a loan.
So, talk to your mortgage broker and when you’re looking at, “What can I borrow?”or your looking at getting pre-approval, just understand, “Will this put a mark against my credit file?” ‘Cause it’s not bad to have a couple or whatever.
But if you’re getting lots and lots of marks against your credit file, then that could be an issue.
So just make sure and you know when a mark’s being put against your credit file and when a mark isn’t being put against your credit file.
How soon can I revalue or borrow again?
So if you’re investing in a property to renovate it or to develop it or even if you’re investing in a property that’s potentially under market value, you want to know how quickly can you revalue that property so you can get equity and then hopefully draw equity out of the property to go ahead and invest again.
There are a lot of lenders out there who don’t allow you to revalue within a 12-month period.
So, speak to your mortgage broker about the lenders that will allow you to revalue faster.
And basically, this will give you an idea of how quickly you can revalue to consider going again.
You’re also going to want to ask them, “After I invest in this property, how soon can I borrow again or what do I need to do to put myself in a position to be able to borrow again and to purchase the next property?”
Because hopefully, your goal isn’t just to purchase one property but to grow your property portfolio and to achieve that financial freedom and that financial security that you’re striving for.
Will My Loans be ‘cross-collateralised’?
Now, I have heard a lot of stories about investors whose loans have been cross-collateralised and it’s cause major problems when they’ve gone and sold their property because the bank shave been able to take that money and pay off debt.
And basically, you want to avoid this at all costs from what I hear.
And so, it’s good to ask your mortgage broker, “Will my loans be cross-collateralised in any way?” Generally going with the same lender for two loans does it by default, even though it doesn’t say they’re cross-collateralised.
So, it’s just something that you want to look at the fine print, you want to understand, “Are these cross-collateralised?” And if they are, try and avoid it, try and get loans that aren’t going to be cross-collateralised.
So there you have some questions to ask your mortgage broker next time you go and see a broker to find out how much you can borrow or get pre-approval or get financed for another property.
If you are in the market, looking at properties and you want to see some high rental yield properties, then I’ve got 10 property listings that I’ve gone out and found for you guys.
You can see what high rental yield properties look like that are likely to generate a positive cash flow.
Did You Know – You Can Get Pre-Approved for a USDA Loan in Mount Vernon?
Finding your dream home is usually the simplest part of the house buying process! Once you see somewhere you want to put in an offer for, youll want to move fast. It helps, therefore, to have your mortgage sorted before you find somewhere you want to buy. You can choose a lender and mortgage, apply for the loan and get your mortgage approved on principle before you even start looking for a house. This means that you know what your budget will be and can be fairly certain that your mortgage will be accepted. The lender will still want to see the valuation survey, however, and there may be other checks that have to be completed before the deal is closed. While most people used to take out their mortgage with a building society or bank, these days there are a number of other options to consider. Smaller, specialist mortgage providers can offer good deals and are sometimes more flexible about terms. Banks and Building Societies Since the market has become much more competitive, the larger finance houses have adapted their practice to become much more flexible with their mortgage deals. You will have the advantage of knowing that a reputable lender provides your mortgage, and local branches can make your day-to-day banking more convenient. Insurance Companies Some companies now offer their own range of mortgage products, which can give good terms, along with insurance products and investments. Legal and General are a well-known example. Check that you are not committed to taking out insurance policies with the lender along with your mortgage. Specialist and Centralised Lenders Generally this type of lender operates from one location you wont be able to visit a local branch, but they may offer lower rates as a result of having fewer overheads to cover. Virgin Direct and Mortgage Trust are two lenders who can offer particularly flexible mortgages. Telephone and internet banking make this kind of borrowing more convenient. Local authorities Council house residents may wish to apply to their local authority for a mortgage. There are also some mortgages available from some authorities for people who wish to renovate derelict houses contact your local council for more information. Its good practise for a lender to subscribe to the Mortgage Code this is a voluntary scheme that means the lender has promised to uphold commitments to good service.
USDA Sub-Prime Loans - Are They For Real?
So let's say you want to invest in propertybut you don't have the minimum 20% deposit required.
Well, you're likely going to haveto pay what's called Lender's Mortgage Insurance.
But what exactly is Lender's Mortgage Insuranceand is it worth the cost? In this episode, I'm going explain Lender's Mortgage Insurance.
What exactly it covers and why you would want to get it.
Hey, I'm Ryan from onproperty.
Au, helpingyou find positive cash flow property and I've just moved house.
If you're watching the video,you can see a bunch of boxes in the background behind me so I apologize that I don't havethe best setup today, but I did want to create some good content for you.
And this is a questionthat a lot of people ask.
A lot of people want to see lender's mortgage insurance explained.
And I do feel like often times, banks and lenders and sometimes mortgage brokers don'treally explain exactly what lender's mortgage insurance is or they don't take enough timeexplaining it so you actually understand it.
So we're going to get down to it, try andunderstand exactly what it is and why it could benefit us and whether or not it's worth payingfor.
Lender's mortgage insurance is an insurancefee that helps to cover the lender when they're taking an increased risk on a loan.
So, lender'smortgage insurance, some people believe that it's actually to cover you personally as theborrower of the loan, but it's not.
It's for the lender to protect them if they're takingan increased risk on a loan.
What exactly is an increased risk? Well, for most properties- most residential properties - banks want to see at least a 20% deposit in which casethey won't charge you lender's mortgage insurance.
They like to see a 20% deposit because ifyou, for some reason, default on your loan and they need to sell their property, they'requite confident that they're going to get at least 80% of the value that you paid forthe property back when they sell the property and this will cover their loan.
However, if you're only borrowing 5% of theproperty's value, then they're a lot less confident that if you default on the loanthey're going to get 95% of the value of the property back.
So it's a higher risk loanfor them.
And so, in order to cover this higher risk, they charge an insurance fee to coverthat extra risk.
Obviously, a lot of people will take out this insurance, not everyonewill need it.
That's the way that insurance works.
So the banks will charge you a one-timefee and everyone else a one-time fee and I guess this insurance covers them against thosefew circumstances where people do default on a loan and they have more trouble sellingthe property and getting enough value back.
So lender's mortgage insurance, it's a one-timefee that you pay and it goes to protect the lender because they're taking an increasedrisk on you to get the loan.
This sounds like it's not very beneficialto you, right? It's a fee that you have to pay, generally, it's added on to the loanso your loan gets bigger, but you've got to pay it and it protects them as the banks.
Well, what's the benefit to you as a borrower? Well, the benefits aren't obvious, but theyare there.
The benefit of lender's mortgage insurance is that if you don't have the fulldeposit, then you can still get money from the bank.
If lender's mortgage insurance didn'texist, then if you didn't have a 20% deposit, you might not be able to get a loan at all.
So, those of you who are going out and wanting to invest with a 5%, 10%, 15% deposit, youwould need to keep saving.
Or, the flip side of that is if they would still lend out themoney, they would need to hike up their interest rates an give you much larger interest rates,so you wouldn't have a great interest rate on your property.
You'd be paying a certainamount of points above the standard interest rate because they're taking increased on that.
So, even though lender's mortgage insuranceis a fee that you need to pay, at least, you can still get a loan and you can still geta loan at a good interest rate.
If lender's mortgage insurance didn't exist, then youprobably couldn't do that.
So, lender's mortgage insurance does have value to borrowers.
However,it's just a bit less apparent than the value that it is for the lenders.
So how much does lender's mortgage insurancecost? This is an impossible question to answer because there's so many different varyingfactors.
For example, the value of the loan is a varying factor.
The percentage of deposit- whether you've got 5%, 6%, 10%, 15%.
That's all going to affect the value of the lender'smortgage insurance that you have to pay.
Basically, the larger the risk the bank feels that they'retaking, the larger your lender's mortgage insurance is going to be.
They may take intoaccount whether you've got proven savings or not.
And if you don't have proven savings,your lender's mortgage insurance might be higher.
They might also look into your credithistory and things like that, but I'm not really sure if that affects lender's mortgageinsurance.
But another factor is that lender's mortgage insurance varies from lender to lender.
So you may go to one lender with the same loan value, the same percentage of depositand you may have a slightly different figure than if you go to another lender.
So if youwant to find out how much lender's mortgage insurance is going to cost for your specificsituation, then just go to Google, type in "lender's mortgage insurance calculator".
You should get a few of those come up and you can punch in your figures and it'll giveyou a pretty close estimate to how much you're going to pay.
But, obviously, you're goingto need to speak to your lender or speak to your mortgage broker to get a more accurateestimate of how much lender's mortgage insurance is going to cost.
If you want to avoid paying lender's mortgageinsurance, the only ways I know how to do this is to save a larger deposit.
So thatmight mean 20% for residential property, it might mean 30% for commercial property.
Butmake sure you speak to lenders to find out how much you'll need to save.
So you can savea larger deposit.
You could buy cheaper properties so your deposit is now worth more as a percentageof the property.
So if you get that percentage over 20% for residential, then you may beable to avoid lender's mortgage insurance.
Or, you can get a family guarantor on yourloan.
so if you've got parents or you've got immediate family who are willing to put uptheir property as security for your loan, then the banks can take some security forthem.
It then becomes a less risky deal for the banks.
And, therefore, you don't haveto pay a lender's mortgage insurance.
So, having a family member go guarantor on yourloan is a way to reduce or remove lender's mortgage insurance.
So, that's how you canavoid it.
Save more, buy a cheaper property so you're deposit's worth more as a percentageof your property or get a family to guarantor your loan.
The last question and thing that I want tocover is: Is it actually better to pay lender's mortgage insurance or is it better to waituntil you have a large deposit? I've seen people talk on both sides of the scale andto say you should absolutely never pay lender's mortgage insurance.
You should always savea 20% deposit when you invest.
Lender's mortgage insurance, absolutely wasted money becauseit's a fee that goes to the bank and you've got nothing to show for it.
And then, theother side of the pendulum are people saying that you should always pay lender's mortgageinsurance and always invest with the smallest deposit possible so you've got the least cashin the deal so that you can take the cash you do have and invest in more propertiesand grow your portfolio faster.
So, some people say never pay it, always save at least 20%.
Some people say always pay it, put as little cash into each deal as possible, which meansyou're going to pay basically the maximum lender's mortgage insurance for your situation.
So there's people on both sides of the table.
I think a better approach to it is to actuallylook at your own situation and assess whether it's worth it for you.
Lender's mortgage insurancecost thousands of dollars.
So you need to weigh up: is it worth investing in this propertynow with the smaller deposit and paying thousands of dollars versus actually saving more toget a deposit? Someone who only has a 5% deposit, they have a lot of trouble saving, but theycould get into the market now.
Maybe they're great at renovation so they can build equityand value in their property, it might be worth investing for them and paying the lender'smortgage insurance because they can into the market faster, they can build equity and they'regoing to make more than the lender's mortgage insurance cost them.
Or they might be someonewho's more risk-adverse.
They want a larger deposit or maybe they've got 15% and they'regreat saver so it's only going to be a couple of months until they're at 20%, well then,it might not be worth it for them to pay lender's mortgage insurance because they are more risk-adverseand they can save the money so they don't have to pay it anyway.
I think the best approach is to look at itand say, what are the risk versus the reward? How much is the lender's mortgage insurancegoing to cost me? And am I going to make more money back than the lender's mortgage insuranceis going to cost me? So if I can invest one year earlier, but I have to pay lender's mortgageinsurance, can I make that money back in one year of capital growth? Or one year of theability to have access to that property and improve the property? Or one year of positivecash flow from a property? So how much is it going to cost me? And then, how much amI going to make out of that and can I make more than it's going to cost me? And that'skind of how I would assess it.
For me personally, I would pay lender's mortgageinsurance to get into the market earlier because I'm not the best saver in the world.
So ifI had enough deposit to go, but it means I got to pay lender's mortgage insurance, aslong as I've done my research, I'm confident in the area, I'm confident in the propertythat I've purchased and I've got a strategy to make money for that property, I'm happyto lock that property down.
Pay some lender's mortgage insurance, but I get it and I'vethen got the opportunity to make money versus just saving and waiting and waiting and thenmaybe not investing in the future because we all know things happen that dwindle ourmoney supply.
Emergencies come up or we decide to go on holidays or whatever it may be.
SoI'm not the best saver so I like taking action, locking it in and moving ahead.
Other peopleare different.
So you really need to assess whether it's worth it for you.
I hope that this has explained what exactlylender's mortgage insurance is and then you can assess for yourself whether or not youthink it's worth the cost that it's going to cost you or whether you'd be better offactually saving extra money so you don't have to pay lender's mortgage insurance.
Just tocover it off again, in case you didn't completely get it at the start, lender's mortgage insuranceis a one-time fee that you pay on the creation of your loan and that fee goes towards de-riskingthe banks.
It's lender's mortgage insurance, it's their insurance - the lender's insurance.
It's going to protect the lender against the increased risk their taking on you becauseyou don't have what they consider a large enough deposit to be a low-risk loan thatthey're riding.
So you pay a one-time free, it protects them.
Apart from that, there'sno benefit to you.
It means you can borrow money, but that money is protecting the lender.
It's not going to protect you in any way.
I hope we made clear what lender's mortgageinsurance is.
So when you're talking to your mortgage broker or talking to your lenderand they mention it, you say, "Okay, yup, I understand.
That's a fee I have to pay becauseI don't have a large enough deposit and it's helping you to be able to lend me this moneywithout charging me an exorbitant interest rate or without saying, 'No, sorry.
We can'tgive you that loan.
'" I'm a big fan of lender's mortgage insurancein the industry.
It lets a lot of people get into the market earlier who want to.
And so,I'm not against the fee.
But, again, you need to assess it for your own situation.
If you're interested in investing in positivecash flow property and you need help finding it, then go ahead and check out my membershipwhere I go out, I find a high rental yield property every single day and share it withthe community.
So head over to onproperty.
Au/membership if that's something that you're interestedin.
Otherwise, until next time, stay positive.