Understanding the mortgage providers are, will help you select the right mortgage company.
There are lots of different mortgage companies available to choose from in today’s lending environment. These sources include private mortgage banks or depository institutions. There are also individual private parties otherwise known as hard money, but for these purposes we will be focused on the two main outlets. Everyone is familiar with the fact banks like Wells Fargo offer mortgage loans. When you work with a mortgage company like this, you will also be asked to open up a checking account as well as a credit card in most cases and you’ll be receiving basic mortgage service at best.
Big banks do provide a very valuable service to home loan industry and that comes in the form of servicing. Banking institutions such as Wells Fargo or Chase are very good at collecting monthly payments and servicing that mortgage, partly due to the fact most are still well capitalized. Here more information on Bank Mortgage Rates.
So the big banks are good at servicing, but what about selecting the right mortgage company?
Now that we have established big banks are primarily very good at servicing we can now understand that the best possible mortgage rates and the best mortgage will almost always be offered by an independent private mortgage banker. Private mortgage banks make loans and sell them to the bigger banks. Because the smaller companies don’t have all the other ancillary services, they can not only close a loan with a better interest rate, but can provide substantially better service and a faster close of escrow. These small mortgage banks operate on guidelines and what are known as investor overlays, which provide them the criteria they use to originate and sell loans in the secondary mortgage market.
Lots of these mortgage companies have strict guidelines which can sometimes make it difficult for a borrower to obtain mortgage financing. For example on an FHA loan, one company’s debt to income ratios might be overly conservative while another companies’s might be much more relaxed, thus able to close the loan quicker. Another example of an investor overlay is a minimum credit score requirement such as a 640. When selecting the right mortgage company, you will want to ask what their investor overlays are on whatever kind of loan program you are seeking. Ask them up front and don’t be afraid to do so because if that mortgage company refuses to tell you, do not work with them. Your home loan deserves professional integrity.
Here are the questions to ask when selecting the right mortgage company for your home financing needs:
1. What is your minimum credit score requirement? (Note, the minimum credit score requirement is 620 for both a all loans including Conventional,FHA Loan, VA & Homepath Loans)
2. What is your company’s investor overlays and how will they affect my loan? (This is very important because it could impact whether or not your mortgage loan will actually close escrow. If you are looking for a specific loan program, specifically ask them what their overlays are for that particular program.)
3. What is your typical turn time for loan approval and closing? (A decent mortgage company should say at least four days for loan approval if not faster, and approximately 30 days for a close of escrow, anything faster is a huge plus to you as the consumer)
4. How accessible is your mortgage company? (this is the question specifically for the loan officer because you should be working with somebody who is responsive and communicates with you appropriately, not two or three days later)
5. Does your mortgage company offer next day funding or table funding? (this is very important especially if it’s a purchase transaction because of the fact you want to make sure you close escrow by your contract date or sooner otherwise you could end up with being in void of contract and getting hit with per day penalties)
Note: A next day funding and a table funding basically means the loan funds immediately within 24 hours. The difference is a next day funding literally means that the loan will fund the next day. A table funding means the loan funds when the loan documents are sent to escrow. It means the loan literally funds with docs. The other perk is funding a loan when underwriting conditions are not completely signed off, this is done on an exception basis. Almost all private mortgage banks do not have this ability, we do.
The right mortgage company will answer all of these questions for you right up front giving you the obvious choice.
One of perks of working for a great private mortgage bank is being able to offer efficient service and competitive interest rates. For every single mortgage loan I offer, the minimum credit score is 620. We have no investor overlays which means we are able to close loans faster and more efficiently than 85% of the local mortgage companies originating home loans today. We aim to get the appraisal back, then send the file to underwriting with the approval allowing us to have the loan approved and cleared for docs on the same day.
Our typical close of escrow time frame is 20 days. Unlike other banks, our entire staff is paid upon performance of mortgage loan origination. Because of this, each and every single person working on your home loan is vested in making sure your mortgage loan closes on time. My personal cell phone # is 707 217 4000. If you are already working with another mortgage company and you would like a second opinion, contact me scott@sonomacountymortgages.com. Maybe you’re thinking about doing a refinance and your curious what the market is? I’d be happy to provide you a no obligation rate quote. You can tell me if you think it makes sense or not. I also can provide you current mortgage rates for santa rosa.
Scott Sheldon can help you select the right mortgage company for your next Sonoma County Mortgage.
