What questions should I ask a mortgage lender in Elizabeth ? 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 Elizabeth. 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 Elizabeth 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.
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So most mortgage brokers in Elizabeth 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 Elizabeth 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 Elizabeth, 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.
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.
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.
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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.
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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 Elizabeth?
>>> WELCOME BACK. WHETHER IT IS TIME TO OWN YOUR DREAM HOME, FINDING THE RIGHT HOUSE IS ONLY THE BEGINNING. >> FIGURING OUT HOW TO PAY FOR IT IS EVEN MORE IMPORTANT. JOINING ME NOW IS JEFF MCCARTHY AND PAT GOSA FROM FIRST BANK FINANCIAL CENTRE WITH SOME IMPORTANT QUESTIONS THAT YOU SHOULD WHEN YOU ARE LOOKING AROUND FOR A MORTGAGE LENDER. GOOD TO SEE YOU GUYS THANKS FOR BEING HERE. AS I MENTIONED FINDING THE HOME IS LIKE THE FIRST GOOD LIKE MOMENT. THAT'S WHAT YOU GOT TO DO, BUT AFTER THAT, KNOWING THE RIGHT QUESTIONS TO TALK ABOUT WITH YOUR MORTGAGE LENDER OR SUCH IS IMPORTANT. >> ABSOLUTELY. SO MANY PEOPLE SPEND YOU KNOW MONTHS LOOKING FOR THE DREAM HOME, THAT THEY ARE GOING TO RETIRE IN OR RAISE THEIR FAMILY IN, BUT A LOT OF PEOPLE DON'T TAKE THE TIME TO FIND THE RIGHT MORTGAGE LENDER FOR THEM. IT'S ALMOST AN AFTERTHOUGHT FOR A LOT OF PEOPLE. THAT CAN BE A BIG MISTAKE IN THE PROCESS. >> WHEN SHOULD PEOPLE START LOOKING FOR THE RIGHT LENDERS? IS THERE A SPECIFIC TIME? >> I TELL YOU, SOONER THAN LATER BECAUSE, YOU WOULD HATE TO HAVE TIFFANY SOMEBODY FIND THEIR DREAM HOME AND FIND OUT LATER THEY DON'T QUALIFY FOR THAT MORTGAGE LOAN. THE SOONER CAN YOU GET IN TO TALK TO A LENDER THE BETTER. AND PREPARE. WHETHER IT IS YOUR FIRST TIME BUYING A HOME OR FOURTH TIME, OUR GUIDELINES ARE ALWAYS CHANGING, THE LOAN PROGRAMS CHANGING, SO IT'S GOOD TO GET IN AND TALK ABOUT YOUR INDIVIDUAL SITUATION WHETHER IT BE INCOME, CREDIT, DOWN PAYMENT WHAT HAVE YOU. >> I KNEE BEING PRO APPROVED AND KNOWING WHAT YOU CAN AFFORD ARE IMPORTANT. WHAT ARE THE VERY FIRST THINGS YOU SHOULD ASK YOUR LENDER? IF I COME IN TO MEET WITH YOU OR ONE OF YOUR SALES STAFF WHAT SHOULD I BASICALLY SAY? >> USUALLY. PEOPLE HEAR FROM THEIR FAMILY AND FRIENDS AND SAY FIND OUT WHAT THE RATES ARE AND CLOSING COSTS ARE. A IMPORTANT ASPECT OF COURSE. MORE IMPORTANT IS REALLY, ASKING ABOUT THE DIFFERENT LOAN PROGRAMS THEY MAY QUALIFY FOR. ALSO THEIR INCOME. YOU KNOW WE HAVE TO SOURCE THAT. IS IT JUST W2 INCOME, COMMISSION INCOME. WE NEWS INCOME THEY ARE TRYING TO COUNT TO QUALIFY. SAME WITH ASOCIETIES WE HAVE TO TRACK THOSE ASSETS A PAPER TRAIL WHERE ARE THEY COMING FROM. THE SALE OF A HOME OR ASSET. MONEY THAT IS GIFTED TO THEM. WE HAVE TO NAVIGATE THROUGH ALL OF THAT. THEN GIVE THEM A GREAT IDEA WHICH LOAN PROGRAM IS BEST FIT FOR THEM. >> THERE ARE DIFFERENT LOANS THAT CAN HELP YOU THAT ARE SO IMPORTANT. WHY DO YOU THINK IT IS IMPORTANT THAT A LENDER HAS EXPERIENCE? >> I THINK A LOT OF TIMES BECAUSE THEY ARE ASKING THOSE QUESTIONS. THEY ARE ASKING ABOUT THE INCOME, THE ASSETS AND WHAT HAVE YOU. THEY KNOW THE LOAN PROGRAMS, THE LOPE GUIDELINES. YOU WANT SOMEONE THAT IS VERY EXPERIENCED IN THOSE TO ASK THE RIGHT QUESTIONS NOT SO MUCH THE CUSTOMER ASKING YOU THE QUESTIONS, BUT SO THEN YOU CAN CREATE THAT PRODUCT FOR THEM, THAT FITS THEIR NEEDS. >> UH-HUH. DO YOU SEE OFTENTIMES PEOPLE COME IN AND THEY DON'T REALLY KNOW WHAT TO ASK OR THEY DON'T KNOW WHAT THEY CAN AFFORD? >> EXACTLY. >> I BET. >> I REALLY SUGGEST PEOPLE TO GET IN AND GET PREQUALIFIED. EVEN BETTER TO GET PREAPPROVED THEN IT GOES TO THE UNDERWRITER TO MAKE SURE WE HAVE ALL OF OUR DUCKS IN THE ROW. >>> A LOT OF PEOPLE I WOULD GUESS JUST GO IT THEIR PRIMARY BANK. THEY THINK OKAY I ALREADY HAVE AN ACCOUNT WITH THESE PEOPLE THAT WORKS. I'M JUST GOING TO GO THERE BECAUSE I'M FAMILIAR WITH IT. THAT'S NOT ALWAYS THE RIGHT DECISION. CORRECT? >> IT VERY WELL COULD BE. IT MIGHT NOT BE YOU'RE RIGHT. DOES THAT LENDER USE GRANTS THAT ARE AVAILABLE TO FIRST TIME HOME BUYERS? DO THEY DO CONSTRUCTION LENDING. COULD THEY DO PORTFOLIO LENDING. FHA, VA. DO THEY HAVE ALL OF THE COATS IN THE RACK SO TO SPEAK WITH THE DIFFERENT LOAN PROGRAMS OUT THERE AND DO THEY UNDERSTAND THEM IF THEY DON'T DO A LOT OF THEM THEY MIGHT NOT BE THE BEST CHOICE. >> UH-HUH. >> ARE THEY COMPETITIVE WITH THEIR RATES OF COURSE AND CLOSING COSTS. >> LIKE YOU SAID THE FIRST THING PEOPLE THINK OF IS WHAT IS THAT PERCENTAGE AT. THAT'S WHAT IS MOST IMPORTANT. IT IS NOT ALWAYS WHAT IS THE MOST IMPORTANT PIECE OF IT ALL. WHAT DO YOU GUYS THINK SETS YOU APART AT FIRST BANK FINANCIAL CENTER? >> FOR ME MY SALES TEAM. WE HAVE AN EXPERIENCED GROUP THEY KNOW TO ASK THE RIGHT QUESTIONS. THEY ALSO HAVE A PASSION FOR THE BUSINESS LIKE I DO. THY THINK THEY WANT TO HELP THAT CUSTOMER HAVE A GREAT EXPERIENCE THROUGH THE LOAN PROCESS AND, NAVIGATE AGAIN, TO BE YOU KNOW LIKE A FUN EXPERIENCE TOO. >> OWNING HOME IS STILL I THINK THE AMERICAN DREAM WHETHER IT IS A CONDO, A HOME, A TOWN HOME WHATEVER THAT MEANS TO YOU, OWNING I STILL THINK IS THE BIGGEST THING. YOU HAVE A GREAT OFFER FOR PEOPLE WHO ARE WATCHING TODAY TO WORK WITH YOU GUYS. >> WE DO FOR MORNING BLEND VIEWERS IF THEY GO TO FVFCWI. COM/300 CLOSING THEY CAN DOWNLOAD A COUPON FOR $300 OFF CLOSING COSTS. THEY CAN USE THAT MONEY FOR PAINT OR A RAKE, TO RAKE NEW LEAVES IN THEIR YARD. WHATEVER THEY NEED FOR THEIR NEW HOME. >>I LOVE IT IT'S GREAT YOU GUYS. PEOPLE CAN COME IN AND MEET WITH ANY OF YOUR GREAT STAFF. FIND OUT A LITTLE MORE ABOUT WHAT THEY ARE QUALIFIED FOR OR DIFFERENT TYPES OF LOANS THAT WILL HELP THEM GET THE DREAM HOME THEY HAVE ALWAYS WANTED. >> ABSOLUTELY. >> HERE'S INFORMATION FOR FIRST FOR FOR FOR FIRST BANK FINANCIAL CENTER. THERE IS A COUPON ON THERE AS JEFF MENTIONED FOR $300 OFF OF CLOSING COSTS. MAKE SURE YOU DO THAT, GET THOSE $300 AND LIKE YOU SAID YOU CAN USE THAT FOR PAINT OR WHATEVER YOU WANT MAYBE TOWARDS THE NEW.
Mortgage Lenders Making The Right Choice
So Steve, What are the requirements for the USDA program? So USDA has a few interesting requirements First of all, you'll need to have at least a 580 credit score Some lenders require a 620 credit score Your household income has to be under the county maximum Like a lot of down payment assistance programs This is based on family size So 1 to 4 is one category and then 5 and above is a higher threshold for qualifying What's unique about this one is the home has to be within a designated area.
So, Typically what that means is.
NOT within a metropolitan area So within our area here (Riverside county) Our local cities around her don't qualify But we only need to go 10 miles away to where there's an open area where there's Several homes that qualify.
USDA stands for United States Dept of Agriculture But it's NOT a farm loan.
Specifically, they don't finance this program for farms.
It has to be a Single Family home without a barn structure on the property.
and then it also has some home price limitations.
The Threshold is a little bit lower than say an FHA loan for the loan limits.
Ok, and how does this program differ from other Down payment programs? So it's different because it's not really a down payment program but it allows financing up to a 100% of the purchase price And it's interesting because you can actually use this program with 1 or 2 of the other programs.
If you need closing cost assistance But, what's unique it's a 100% Financing So you don't need a 2nd or a 3rd lien on the property.
Your interest rates are typically lower Than if you combine it with a down payment assistance programs And you don't have to repay any down payment assistance It has a monthly factor It's like mortgage insurance upfront It's financed at a monthly component Much less than FHA So if you can qualify for this program It's better than FHA And As I mentioned, rates and payments Are typically lower on this program So USDA is really a great program.
Great! And on average How much does the home buyer have to come in with out-of-pocket? So Again, we are financing the whole loan Purchase price up to 100% So the only thing remaining is then the closing costs Typically, plan on around 3% of the purchase price for funds to close.
The question there then becomes, Well, Where does that come from? Typically, we ask the seller to cover those costs And if we can get the seller to cover 3% Then, the buyer may only need to come in with an earnest money deposit.
And they may even get most or all of that back.
If the seller is covering all the fees.
One unique feature about USDA Versus all other loans is that if the home appraises for more than the purchase price We can finance the closing costs Up to that appraised amount So, no other loan I know that we can actually finance the closing costs.
on that type of loan What type of home buyer is this program ideal for? So certainly those that don't have access to money for a down payment Anyone that wants to live that doesn't have to live within a metropolitan area because, again, the house has to be in an area that is not in a high densely populated area It's also suited well for people who have some credit issues and anybody that qualifies for this program would definitely be better served than going FHA so those type of people.
And besides the Area restrictions are their any other property restrictions? So property restrictions are going to be similar to FHA They'll do manufactured homes They'll do homes with Casitas So no real other restrictions.
Just if it conforms to the FHA guides then it should qualify for USDA There's a couple little quirky things That you don't run into very often Like you can't actually have a barn on the property It definitely can't be for agricultural purposes It has to be for residential purposes Ok Great! Thanks Steve.