competitive fixed factoring rates and programs

Posted by sharif on August 21st, 2019

competitive fixed factoring rates and programs

There are MANY factors that affect the rate and closing costs that you will be offered. It is up to you as a mortgage borrower to know how to find that "best deal", and make sure it is actually delivered as promised.

The mortgage loan process is not fun. It can be a pain in the neck, but it's crucially important, and borrows need to navigate the process correctly. What IS fun though, is saving money. If you understand all of the information presented here, you WILL get the best deal, and you WILL save money. So enjoy!

Factors that affect your loan (most of which are covered in the mortgage pre-approval worksheet that I provide to prospective clients, but not all of these issues can be addressed without your credit report):

Loan Purpose, Property Type, Property Purpose, Desired Loan Program, Loan Amount, LTV, DTI, Income, "Liquid"Assets, Housing Payment History, Employment History, "Middle" Credit Score, Items that appear on your Credit Report that determine the scores, Potential Mistakes on your Credit Report, Positive and/or Negative Compensating Factors, and more.

Table of Contents

1. How to choose a lender (or mortgage broker, or loan officer, etc.).

2. Why shopping verbal rate quotes and Good Faith Estimates (GFEs) is a big mistake, and potentially very costly.

3. Why a lender who provides verbal rate quotes is being unprofessional, if not unethical.

4. The difference between pre-qualification, pre-approval, and final approval, and why it is so important that you know the difference.

5. Why pre-approval is so important (and why anything short of pre-approval assures you of nothing; Shop pre-approvals, not non-binding quotes and GFEs).

6. Why limiting yourself to dealing directly with a bank may very possibly not be your best bet.

7. Why you might choose a Correspondent Lender or Mortgage Broker.

8. Understanding the business model of your lender: What's in it for them, and, what's in it for you?

9. How YOUR rate and closing costs are determined.

10. What happens when your credit report is run.

1) How to choose a lender, mortgage broker, or someone else:

Lenders, correspondent lenders, mortgage bankers, mortgage brokers and loan officers can all theoretically get you a suitable mortgage loan, but how to differentiate one from another? For now, let's agree that a common attribute of all of us is that we are all human beings (though some are more

civilized than others). So what qualities do you look for in any individual that you might choose to do business with? If you are not sure, I'll make a suggestion as to what to demand from a lender. You need to be able to trust the person. You must be able to trust their integrity and level of knowledge. How do you know if you can trust a lender's integrity? You must ensure that their business model is transparent (easily understood), and that all pertinent information is put in writing in a timely manner (full disclosure).

Then, you must be told exactly what to expect throughout the process, and the sequence of events must be explained in detail. Once the process is explained in a way that you fully understand, the lender should proceed to do everything that has been promised as it was described to you (accountability). Explained that way, it seems like a simple and sensible approach, right? Unfortunately, too often things don't work out that way. The good news is that well-informed mortgage borrowers know how to control the process and command best results. The other sections included in this piece will specifically describe how to command the transparency, full disclosure, and accountability that everyone wants and deserves.

2) Why shopping verbal rate quotes and GFEs is a big mistake, and potentially very costly:

Very often, people shopping for a mortgage loan do the following: They initiate their search on-line, or make one or more phone calls, and say "I just want to know what the rate is, and I don't want anybody to pull my credit". When a prospective customer says that to me, I am thinking to myself, "Yes. I know that. That makes it impossible for me to give you an accurate and suitable response, but I understand your goal and your concerns". That is what I am thinking, but what I say goes something like this: "Well, of course the rate, AND the Closing Costs are very important... everyone wants the lowest rate and closing costs, right?" RIGHT! It gets very tricky at this point, because people want what they want, and most people don't want it to be suggested that they may be on the wrong track. If I begin to explain the inefficiencies of quoting a rate and closing costs without knowing a thing about the person's objectives and qualifications as a borrower, many people will simply move on to get the answer they are looking for from someone else. Unfortunately, these are the borrowers that fall victim to predatory lending, and I will go into detail in the next section.

3) Why a lender who provides verbal rate quotes is being unprofessional, if not unethical:

The factors I pointed to above the table of contents describes much, but not all, of the information a lender needs to actually get a loan closed in a compliant manner. This article should hopefully not only increase your appreciation of all that goes into getting a loan successfully closed (especially in this tight-credit environment), it may also help you clarify your objectives if you are not 100% certain of what you want. The point is, there are so many variables that can affect your rate and closing costs, and many specifics that differ from one borrower to the next. That is why, if you ask me what "the rate" is, I honestly don't know. Loans are like snowflakes, or fingerprints. At first glance they may appear the same, especially to the untrained eye, but the fact is that all mortgage borrowers are different, as are the loans they may qualify for, and also the lenders making the money available.

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Joined: August 7th, 2019
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