If you are looking to buy a house, you also need to be looking into how you plan to finance it. Of course, if you already have a mortgage, you may want to stay with that company. However, if your financial situation has changed since you took out the mortgage on your current home, you may want to consider a different mortgage type from a different company. Here are a few of the popular mortgage lenders and who they serve best.
Banks and credit unions are direct lenders. They look over your mortgage application and then decide whether or not to give you the money from their own funds. You will save money on hidden costs charged by a middle man and may feel comfortable dealing directly with the company that holds your loan. Generally, you will need to have excellent credit, a good work history, and solid proof of your finances. However, you will be limited in the types of mortgages available as not all direct lenders will offer adjustable rates, shorter-terms, or balloon payments. Some institutions do not participate in the different mortgage programs.
Mortgage brokers work with many different lending institutions. You will have the option of almost any type of mortgage and may apply to different programs available such as a Fannie Mae, Freddie Mac, or a VA loan. They also work with lenders who are more willing to take a risk. If you are elf-employed and/or do not have all the necessary documentation for a direct lender loan, you should use a mortgage broker. However, be prepared to have extra fees added to the cost of the loan to pay the brokerage company.
Home Builder or Real Estate Agency Lenders
Home builders and real estate lenders are also a type of direct lender, but they are not financial institutions. In many cases, they are the easiest way to get the money you need to buy a home. However, they often charge more for the services. You may pay a higher interest rate or need a larger down payment in order to get the loan. This should be your last choice if you find you are having trouble obtaining the finances to make the purchase.
Buying a home is a big deal when it comes to your finances. While it may be possible to refinance with the same or a different mortgage company over time to save money in the long run and monthly, if the worth of the property does not go up and you do not have much equity in it yet, or your financial situation does not improve much, you will be stuck with the same loan and payments for a while. Choose the right type of mortgage and mortgage company in the beginning so you will be comfortable with the deal you made for the term of the loan. Check out a site like http://republicstatemortgage.com for more information.