Looking for the Top Mortgage Lender in New York City?
When you’re searching for your first home, you’re also searching for your first mortgage lender.
Now, it’s difficult to make specific recommendations on lenders because it’s way too tough to stay up to date on the many thousands of lenders who work in the New York State Area
However, USDALoanInfoNewYork can give you some very useful tips for how to approach your search for a lender.
When you’re looking for a mortgage lender you want start off by talking to a mortgage broker who has a good reputation in your area.
There are many institutions that loan money to home buyers. Commercial banks, private lenders, credit unions, mortgage bank companies, insurance companies and pension funds. It can get confusing as things are always changing in the mortgage industry.
Policies, interest rates, mortgage programs, where the funds come from, and investors are all changing and can affect where, from who, and the type of mortgage you will get to purchase the property you have chosen. Certain entities may offer you better rates depending on your credit history, debt, income, and expenses. It is a good idea to shop many different resources so you can get the best deal possible.
The mortgage market is comprised of a primary and secondary market. These two markets work together to give money to a borrower and offer returns on investments to investors.
The primary market occurs on the retail end, meaning a mortgage lender sells directly to the consumer. You may use the services of a broker or loan officer in order to have this transaction run smoothly. This is the place where mortgages are originated and the money is given directly to the borrower. In the primary market, mortgage lenders make there money on processing fees. There are often many fees associated with getting a mortgage that the buyer is responsible for.
Because there can be many fees as charged by the mortgage lender, it is important to know exactly where your money is being spent. You should ask for an itemized report for every fee. Unfortunately there dishonest mortgage lenders and they will make up charges and fees that really don't have any effort or actual action behind them. This is how some borrowers can get scammed, and often they may not even know it!
The secondary market manages mortgages that have already been originated in the primary market. What occurs here is the mortgage lenders package many mortgages together and sell the notes to investors. Mortgage lenders replenish their cash reserves that can be used towards the origination of more mortgages. The investors make money off of the interest that is charged on the mortgages.
There are both private and public investors that buy these notes. Public investors include Fannie Mae, Ginnie Mae and Fannie Mac that are all government supported. Private investors may include banks, thrift institutions and other individual private investors.
The mortgage lender really has a circular pattern, originating loans, selling them to investors and then using that money from the sales to issue more loans.
Many times, you do not even know that your mortgage is going to be sold into the secondary market. However, the mortgage lender should always notify you of this transaction if the mortgage is sold to someone else. If you have questions about this process, you can ask your mortgage lender as to what his or her process is.
So when you purchase a mortgage, then you are working in the primary market. The secondary market is for mortgages that have already been originated by the mortgage lender and they are being bought and sold as investments for either private or public investors. This mortgage process keeps money flowing through the industry and makes more money available to the public to continue property.
You should also, at the same time, talk to a regional lender, a credit union (if you belong to one or you can join one) and a small local bank.
Each of these different types of lenders will offer different loan programs at different prices.
You should also ask friends and relatives who they’ve used for their home loans and how the experience went.
But emphasis is on the experience.
I have a great friend who once asked her sister for a lender recommendation, and the sister gave her a name and my friend had this horrific experience.
And when she went back to her sister to see what kind of experience her sister had had with this person, the sister confirmed that she, too, had a horrific experience.
“Hello! Why did you give me that lender’s name?” my friend asked, and the sister said, “Well you weren’t specific that you wanted someone good.
Sounds like a Seinfeld episode, right? And yet, this kind of stuff goes on all the time.
So here are some questions you should ask the person providing the recommendation that will help separate the wheat from the chaff:
- Did the lender repeatedly ask for the same documents?
- Is the lender organized?
A good lender should enable you to close on a home within about forty-five days – unless there’s some real serious problems with the house – so make sure to ask your friends and relatives if their lenders were able to meet that standard.
It may sound obvious, but it’s a good idea to look for a lender who specializes in making residential loans and has a reputation in your area for coming through with these loans.
Banks that aren’t generally known for their mortgage lending can be tougher to work with than some of the really big lenders.
And while you may be thinking to yourself, “I want to avoid the big banks,” you’re probably going to end up with one anyway.
Even if you go with a mortgage broker, that mortgage broker may actually work with a whole bunch of big lenders to fund your loan.
Above all, you need to find a lender that helps you understand the mortgage application process in a way that makes you feel comfortable and secure.
This is a huge decision.
You’re going to finance this property for the long run, and you want to do that with the right kind of partner.
And I just want to give a shoutout to anybody who is closing around October of 2015.
If you are, please watch the videos that I’ve made on the TILA-RESPA changes that are coming your way.
Right now they’re scheduled to go into effect October 3rd of 2015.
If you are looking to close around that, either before or after, you may have to build in some extra time to make sure that you don’t get caught up in all the craziness that’s going to go on I think when TILA-RESPA actually goes into effect.
In 2015 there are several types of different mortgage loans that are available. How do you wade through them to find out which one will be the best option for you? One way is to learn about the pros and cons for each type and then narrow the field from there. To that end, we will discuss a few of them and their pros and cons.Fixed Mortgages vs. Adjustable Rate MortgagesWhen you are looking at taking out a mortgage then you first need to decide whether you want one that has a fixed rate or one that has a rate that is adjustable. Every single type of mortgage will be either one or the other. Incidentally, you might also have a mortgage that combines the two. Here is a quick breakdown of the differences. Fixed Rate loans will have an interest rate that will remain the same for the duration of the loan. Due to this, your monthly payment will remain the same until the loan is completely repaid. Adjustable Rate loans have a rate of interest that can and will fluctuate. In many cases you will have a fixed rate of interest for the first year and then will change on a yearly basis. Loans that have this first 'fixed' period are the hybrid loans. Loans of both types do have their pros and cons just as all things do. A pro for adjustable rate loans is that the interest rate that they begin with is often lower than that of a fixed rate loan. However, the interest rates in the future will vary and this can turn into a con quickly. The monthly payments on an adjustable rate mortgage can and often do rise exponentially the longer they are carried. Alternatively, a pro for the fixed rate loan is that your monthly payment amount will never change. However, due to that the rate of interest is generally higher.Jumbo Loans or Conforming LoansAside from the basic types of loans there is another thing that must be considered. That is the actual size of the loan that you need. The amount of money that you are requesting will put your loan into one of two categories: jumbo loans or conforming loans. What is the difference? Jumbo Loans will be for an amount of money that exceeds the limits for conforming loans that are set forth by the Freddie Mac and Fannie Mae organizations. The lender of these types of loans will have a higher amount of risk than that which is experienced with a conforming loan. However, borrowers for this type of loan must have a credit history that is impeccable and must also come up with a substantial down payment as compared to what is necessary for a conforming loan. Additionally, interest rates for jumbo loans are typically higher when compared to the rates associated with a conforming loan. Conforming Loans are those that meet the parameters set forth by the Freddie Mac and Fannie Mae organizations. Typically these guidelines have to do with the size of the loan. Both Freddie Mac and Fannie Mae are entities that are controlled by the government. They both sell and purchase securities that are backed mortgages. In plain English, they buy the loans from various lenders where they are generated and then they sell those loans to various Wall Street investors. Conforming loans will be those that fall within their regulated size limits as well as those conforming to their other criteria. Now that you have this information, making the decision as to which type you need should be a little easier.