IS YOUR BANK THE BEST PLACE TO GO? – Part 1
You’ve decided to make a move and buy a new home, what’s next? The first step should be to obtain a Pre-Approval Letter. It may seem like the logical step is to call your bank. They have your banking accounts and since the Bank has your financial information, the process will be easier. Unfortunately, this is rarely the case. In fact, it is typically a much more streamlined process to obtain a loan through a Mortgage Banker.
Things to think about:
Your bank has your deposit accounts on record. They will not have all of the other supporting documentation you will need to provide like, paystubs, tax returns etc….
The majority of loans are guaranteed by either Fannie Mae, Freddie Mac, or HUD. Then they are bundled into Mortgage Backed Securities (MBS) and sold throughout the globe. To be salable, loans must meet specific guidelines. Banks, Credit Unions and Mortgage Bankers all have to follow the same guidelines. Whether your loan originates at the financial institution in which you bank at or any other lender in America, the documentation requirements are the same.
Many people falsely assume that if you get a loan through your existing bank, they will hold the loan on their books and can underwrite the file to their own guidelines. Almost all fixed rate mortgages are sold and your bank may or may not hold onto the servicing after closing.
Mortgage Bankers are all required to take significant hours of education to get their license and continuing education each year to keep it active. Banks are not required to license their Originators. Who would you feel more confident talking to?
With inventory as tight as it is, you need to work with a lender that will help position yourself to have the best possible chance of getting your offer accepted. This means working with someone that is willing to pre-underwrite the file and issue a full-blown pre-approval prior to you making an offer. Better yet, utilize a lender that offers the seller a $5,000 guarantee to back-up their pre-approval letter…..Check back next week for the second installment…
Until Next Time!