What questions should I ask a mortgage lender in Delran Township ? 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.
USDALoanInfoNJ is going to go through 10 different questions that you can ask your mortgage lender in Delran Township. 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 Delran Township 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.
Is a USDA Loan Right For You?
So most mortgage brokers in Delran Township 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.
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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 Delran Township 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 Delran Township, 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.
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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.
Chastin J. MilesBlockedUnblockFollowFollowingDec 22, 2015Before you start searching for a home, the first questions you need to ask is “How Much Can I Afford?” Unless you plan on paying all cash for your home, this is not a question you can answer on your own. You will need the assistance of a mortgage loan officer. A mortgage loan officer will be the one to qualify you for a home loan or commonly referred to as a mortgage.There a different mortgage programs available but they do all have different qualification requirements and different terms. Your specific financial situation will determine the type of loan that would be best for you. One very common type of loan is a FHA loan. Recently, I interviewed one of my loan partners so that he could give us all a better understanding of the FHA loan. This is what he had to say:Chastin: What is an FHA loan?Daniel: An FHA loan is a federal housing administration loan. Essentially, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments. It is designed to be an affordable alternative to help more people live the American dream of home ownership. FHA loans are popular with mortgage borrowers because of lower down payment requirements and less stringent lending standards.Chastin: What are the qualifications for an FHA loan?Daniel: Someone like me, a DIRECT LENDER can go right to the government guidelines with no investor overlays, with that being said it is required per FHA guidelines to have a 580 credit score minimum with established credit history. The higher your score, the better interest rate one will be approved for. Your DTI ratios have to be below 43% for scores under 620, and 57% for scores over 620. And of course the 3.5% down payment, which can be gifted from friends family etc.Chastin: What is “DTI” for first time home buyers?Daniel: Ah yes, debt-to-income ratio. It is the mathematical equation of your monthly debt obligation associated with your CREDIT REPORT and other LIABILITIES (child support, alimony are good examples and it does not include utility bills or anything of that nature) divided by your monthly income. For example someone with a $300 car payment $50 in credit card minimum payments and $150 student loan payment, would have $500 in monthly obligations plus proposed housing payment divided by income for DTI ratio.Chastin: What is the minimum down payment required for FHA loan?Daniel: Minimum down payment is 3.5% of the borrowers own money or gift. It cannot come from seller concessions or selling party. All money needs to be sourced and verified. A good real estate agent like yourself can typically get closing costs covered by the listing party requiring the borrower to only come with the 3.5% to the tableChastin: What do you think personally of FHA loans?Daniel: My personal opinion- it is a great cheap alternative one can use to get into a new home. I think a lot of first time home buyers should utilize the 3.5% down payment keeping maximum liquidity in your financial situation, after all in DFW you break even on your investment into a home shortly after a year of ownership with the market appreciating so much. OR perhaps use FHA to build credit and equity into a home, as you better position yourself financially you can refinance into a conventional loan to drop the mortgage insurance required on FHA mortgages. It also is more lenient than pretty much every other mortgage product out there, which makes it easier to be approved for if you have financial struggles recently.There you have it, thats an FHA loan. I’m sure that didn’t answer all of your questions about it but it should have given you a pretty good basis. If you have other questions, stay tuned. We will be doing a video interview very shortly where we get into more detail about it.
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.
What Is A FHA Home Loan?
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 Delran Township?
I came across something the other day that really excites me. The U.S. Department of Agriculture (USDA) has a loan product called "Business and Industry". This loan guarantee program is designed to get business moving in smaller and rural communities. They don't actually make the loan, but similar to the SBA, they guarantee a loan through a commercial lending institution. I had never heard about this in the past but I have already submitted two different loan requests to two different banks.
Here are the main points to consider when thinking about obtaining a USDA loan guarantee.
- The funds and the business have to have to be in an area that is less than 50,000 inhabitants. A small incorporated city within a larger SMSA will not work. It has to be a smaller rural community.
- Loans can be for almost any business purpose. From equipment to working capital to real estate; and you can use it for investment property too.
- Loans can range up to $25 million and larger in some cases.
- You can get a fixed rate and have up to 30 years to pay the loan off.
- They will give you up to an 80% loan guarantee.
- The "extra" paperwork is limited but the loan must go to the USDA office to be approved.
- Most existing commercial lenders are qualified to participate. In some cases, other kinds of lenders may qualify.
- No balloon payments are allowed, so the bank will have to write a fully amortizing loan.
- There are only a few unqualified uses of the funds or types of borrowers.
- Once the bank has done its due diligence, the USDA will take anywhere from 30 to 60 days to make their decision. This depends on their work load. A pre-approval is available upon request.
This is good news for those who have projects in smaller communities. It seems that there are many aspects of this program that are a bit more "user friendly" than a typical SBA loan guarantee but most things are very similar in nature.
Like an SBA guaranteed loan, the USDA loans can be sold on the secondary market and a banker can get a return of over 10% in some cases. That just may entice your banker to lend you some money guaranteed by the USDA, or even the SBA.
I have found a number of banks who are willing to work with the USDA, so if you need a business loan in a small community, give me a call and let's see what we can do. Good luck.
Unsecured Personal Loans: A Risk-Free Loan Option
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.