Why Use a Broker?
Independent mortgage brokers have had a significant positive impact on the lending industry. Today, the use of a professional mortgage broker is one of the key strategies used by sophisticated borrowers.
What is a Mortgage Broker?
A mortgage broker is an independent real-estate financing professional who specializes in the origination of residential mortgage loans. Mortgage brokers normally pass the actual funding and servicing of loans on to wholesale lending sources. A mortgage broker is also an independent contractor working with (on average) as many as 40 lenders at any one time. By combining professional expertise with direct access to hundreds of loan products, your broker provides the most efficient way to obtain financing tailored to your specific financial goals.
What Do Mortgage Brokers Do?
In the volatile home-lending market, mortgage brokers can serve as safeguards, offering their clients security, safety, and peace of mind. One of the broker’s most important functions is escorting your loan application through the entire process, constantly patrolling the component transactions for possible breakdowns. A professional mortgage broker can wade through the mountains of rate data and program options, researching current market conditions to find the most accurate and up-to-date information about cost-effective loan options.
Brokers Handle the Details!
There are literally thousands of variables that can affect the outcome of your mortgage transaction. That’s why you need a mortgage broker to act as a liaison between the title and escrow company, real estate agent, lender, appraiser, credit agency, the underwriters, the processors, attorneys, and any other services which may affect your transaction.
A mortgage broker also:
Discusses and explains financing program options
Informs you, in writing, of lock-in options
Explains all documents of the loan application
Explains all associated costs of the loan application
Explains the disbursement of all loan applications
Explains the loan process, from application to closing
Provides you with a good faith estimate of cost and fees
Communicates with you throughout the loan process in a timely manner
Coordinates the final closing of your transaction
1. There’s less competition
Competition for houses drops off in the fall, a time many people consider to be off-season in real estate. But there are still homes for sale — and in some cases, there’s just as much inventory as there was during the spring and summer. Fall is a great time to take advantage of a deal on a home too.
2. Sellers are worn-out
Some sellers who put their homes on the market during the prime selling times of spring and summer might have been a tad overconfident by listing their homes for more than buyers were willing to spend. After months of no action, these sellers are often ready to make a deal. Work with your agent to take advantage of any homes that may have been sitting on the market a while.
3. Sellers are serious
Not all homes on the market in fall are summer leftovers. Some people need to sell in the fall because the timing is right. Maybe they were having a home built, and it’s now ready. Maybe they need to move because of a job. When sellers are more serious that could be more willing to negotiate and accept a lower offer.
Get prequalified today at 833 – START VA.
What is a credit score?
A credit score is a complex mathematical model that evaluates many types of information in a credit file. A credit score is used by a lender to help determine whether a person qualifies for a particular credit card, loan, or service. Most credit scores estimate the risk a company incurs when lending money or providing a service. More specifically, it determines the likelihood that the person will make payments on time in the next two to three years. Generally, the higher the score, the less risk the person represents.
How can I get my credit score?
You can purchase a credit score by contacting one of the nationwide consumer credit reporting companies listed below. Or you are entitled to a free report once a year by going to www.annualcreditreport.com.
Equifax – www.equifax.com
Experian – www.experian.com
TransUnion – www.transunion.com
What factors influence your credit scores?
The credit scoring formula takes into account multiple factors from your credit report. The impact of each factor fluctuates based on your own credit profile. The mains factors are:
Length of credit history
Severity and frequency of derogatory credit information such as late pays, collections, bankruptcies, charge offs, and public records.
The proportion of balance in relation to your credit limit on credit cards.
The total balance owed on your credit report.
The number of inquiries you have in the last 12 months.
Types of credit account (i.e., revolving vs. installment).
How long will a foreclosure affect my credit score?
A foreclosure remains on your credit report for 7 years, but its impact to your credit score will lessen over time (usually after two years). While a foreclosure is considered a very negative event by your credit score, it’s a common misconception that it will ruin your score for a very long time. In fact, if you keep all of your other credit obligations in good standing, your credit score can begin to rebound in as little as 2 years. The important thing to keep in mind is that a foreclosure is a single negative item, and if you keep this item isolated, it will be much less damaging to your credit score than if you had a foreclosure in addition to defaulting on other credit obligations.
What is the difference between a short sale and a foreclosure on your credit?
A short sale typically occurs when the value of your home is worth less than the amount you owe on the home, but the homeowner doesn’t want to let it go to foreclosure. So instead, the homeowner makes a deal with the bank to put the home up for sale in a short sale proceeding and give the proceeds to the bank. The difference on your credit, is that instead of having a “Foreclosure” on your credit report, your loan will be reported as “Settled” or “Charged Off”. The impact on your score is slightly less, and it doesn’t have the same stigma as a “Foreclosure”.
How will a bankruptcy affect my credit score?
A bankruptcy will always be considered a very negative event by your credit score. How much of an impact it will have on your score will depend on your entire credit profile. For example, someone that had spotless credit and a very high credit score could expect a huge drop in their score. On the other hand, someone with many negative items already listed on their credit report might only see a modest drop in their score. Another thing to note is that the more accounts included in the bankruptcy filing, the more of an impact on your score.
What are credit inquiries?
An inquiry is a record of someone checking your credit information. Inquiries come in two distinct categories: “hard inquiries” that occur when a business views your credit report for the purpose of an application and “soft inquiries” that occur when your credit is checked for other reasons. If you apply for a new credit card, a hard inquiry record will appear on your credit report and may impact your credit. When you check your own credit report, or when it is checked for a pre-approved marketing purpose, it is considered a soft inquiry and will not harm your credit score.
How long do inquiries stay on your credit?
Most hard inquiries remain on your credit report for two years from the original placement, but they only affect your credit for one year.
Do all inquiries have a negative impact on your credit score?
No, there are hard inquiries and soft inquiries. Only hard inquiries impact your scores. For instance, when you apply for a mortgage loan, an apartment, auto loan or a credit card, you authorize the lender to request a copy of your credit report. These types of inquiries, prompted by your own actions, appear on your credit report and can have a negative impact on your credit score. On the other hand, when you request your own credit report online or directly from the credit bureaus, these inquiries do not impact your credit scores. Also, when an employer checks your credit for employment purposes, they do not impact your scores. These are called soft inquiries.
How can I limit who makes inquiries?
You may request that consumer reporting agencies do not distribute your name on lists used by creditors and insurers to make unsolicited offers of credit and insurance. Requests can be made by telephone or online.
Phone: Call (888) 5-OPT-OUT (Will last for two years).
How are credit inquiries factored into your credit scores?
There are five types of information used to calculate a Credit score at any given point in time. Each type of information counts as a percentage of a total credit score:
Payment history = 35%
Amounts owed = 30%
Length of credit history = 15%
New credit (inquiries) = 10%
Types of credit in use = 10%
These percentages are based on the importance of the five categories for the general population. For particular groups, such as people with relatively short credit histories, the importance of the categories may differ.
Inquiries are a subset of the “new credit” category shown above, which accounts for 10% of the total credit score. Their importance depends on the overall information in your credit report. For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. What’s important is the mix of information, which varies from person to person, and for any one person over time. On average inquiries affect your scores anywhere from 5-10 points. But, remember, this depends on your specific credit profile.