Mortgage Broker in California

Direct Lender or Mortgage Broker - Most people think a mortgage broker is the middle man in a lending transaction and they think that by going to a direct lender they will save time & money. Mortgage brokers have access to multiple lenders and hundreds of loan programs. This gives the mortgage broker an advantage over the direct lender who can only offer you programs that they have.

Mortgage brokers do not lend money. Most of them are firms providing services rather than loans. The lender is the one who provides the money to the borrower at the closing table. The lender also makes the final decision regarding loan approval.

One of the biggest benefits a broker is able to offer is that they are able to offer you the type of product that is best for you, given your current situation. They are not limited to a couple loan types that may only be best for a small percentage of the population.

Many loan officers working for brokers operate on a flexible schedule. They are often willing to drive to meet you at your home - even during the evening or on weekends. This flexibility allows for an entirely different level of service, and can make getting your mortgage much more 'hassle-free'.

A direct lender is generally not only limited to their specific home loan programs but they are limited to use the rates and pricing that their company offers and they also must use thier company's underwriting guidelines. A mortgage broker however is able to shop available programs and different underwriting guidelines to find something that may be more suited to your individual specific needs. Mortgage brokers are also able to shop different rates and pricing. Therefore, you can usually obtain the exact loan you are looking for with the rate that you deserve by using a mortgage broker, as opposed to maybe having to settle with something else from a direct lender.

Although some mortgage bankers have the capability to broker loans out to other banks, most prefer to sell their own loan products, because they can usually earn more in finance charges with their in-house mortgage programs. Mortgage brokers usually have no preference to which bank to submit a loan application to. There only concern is the loan program being right for the borrower.

Direct lenders work with retail rates. Mortgage brokers have access to whole sale rates. Often you can get a more competitive rate by working with a mortgage broker.

Should I use my current broker to refinance - If your mortgage broker did a good job with your first mortgage loan there are many reasons to do business with him/her again. You may be able to secure a slightly lower rate on your refinance. You also have the advantage of the broker having all your information on file already reducing the amount of questions you have to answer on the application.

Even if you did like your previous mortgage professional, it is always a good idea to get a couple of quotes from different companies. If the previous mortgage broker is way out of the ball park, they may be able to restructure the loan to get you into a better situation.

Anytime you find a mortgage broker that you are completely satisfied with and feel you can trust you should stick with them for all of your future mortgage transactions. By sticking with someone who is familiar with your personal situation this can help them provide excellent advice, become more acclimated and familiar with your finances and goals, and find the right home loan program for you. Also, many brokers will offer discounted rates or fees when you go through them again for your home financing needs.

If your mortgage broker served you well before, then they will serve you well again.

Questions to ask your mortgage broker - When you apply for a mortgage loan there are many important questions you will want to ask your mortgage broker. The questions you ask will give you a clearer picture of the mortgage you will be receiving and if it is the mortgage you want. These questions are but are not limited to the following.

Will I be charged points

Some lenders will charge points and others will not. Points are reflected as origination fees on your good faith estimate. Some brokers charge points as a fee for their service others charge them to provide you with a lower rate.

How long is my mortgage fixed? How often can it adjust? How much can it adjust for any one adjustment? What is the lifetime limit on the rate? What would my payment be if the rate were to go that high?
You need to know these answers for Adjustable Rate Mortgages. You need information about how your payment would rise in a worst case scenario so you can make an intelligent, informed decision. A good experienced loan officer can quickly calculate these numbers for you.

Does my loan have a pre-payment penalty?
Some loans come with a pre-payment penalty and should be disclosed when being presented to you as an option. A loan which has a pre-payment penalty feature may reduce your interest rate or cost, but it may also cause you problems if you decide to sell your home or refinance before this pre-payment period is up. A pre-payment penalty can be as much as 6 months of interest payments.

Will you sell my information to other loan officers?

This question is especially important if you are applying for a mortgage online. Many mortgage websites on the internet are "leads" companies that gather and sell applicants' information to other mortgage companies for a profit. These "leads generating" websites often advertise to have multiple lenders competing for your business. The truth is they would sell your information to various companies. To avoid having your information being sold and resold, and being harassed by endless phone calls for years to come, work only with mortgage brokers and lenders who do not sell your information.

Something to ask your mortgage broker is:

What will my total closing costs be?

Your broker, or any mortgage loan officer, is required to provide you with an estimate of your closing costs within 3 days of loan application. This is a great time to review what this home-loan transaction is going to cost you and ask questions about any fees or charges that you are unsure of.

May I see the Amortization Schedule? You may want to ask your mortgage broker for the amortization schedule. This gives a clear and concise 'Landscape View' of the amortization. For most non professionals, it is easier to spot term and rate adjustment properties of the loan this way.

Does my mortgage have a Pre-Payment Penalty

A Pre-Payment Penalty is a fee that is charged to by the lender if you refinance or sell your home within a given period of time. Pre-payment penalties are very common with sub-prime loans. Even with a mortgage from a more traditional bank you may have or want a pre-payment penalty. There are very few circumstances where a pre-payment penalty will interfere with your future plans. Accepting a pre-payment penalty may also lower your points and/or rate on the loan.

How long is my preapproval good for?

The length of a preapproval letter can vary, in general they are good for 30 days. If your preapproval letter expires, you will need to become prequalified again by your mortgage professional.

How Long is my rate fixed for

It is better to ask how long your rate is fixed for because it forces an honest answer. More unethical brokers may respond to the question, "Is my rate fixed or adjustable" with something misleading like, "You have a 5 year fixed 30 year mortgage." While many people might misinterpret this to mean that it is fixed for 30 years and not hear or understand the 5 year comment, the truth is you are getting a 5 year ARM. If you ask, "How long is my rate fixed for" the same broker might be more compelled to answer with "5 years" indicating that the loan is adjustable.