Mortgage Loans

[macwood]

Hi Everyone! I'm a frequent lurker to these boards and have learned so much about the process and gained tons of optimism! I went from thinking that home ownership was a pipe dream  to actually thinking that this could be possible in the next 6 months or so.  Myfico has my score at 660 (up from 555 last summer). Now that my score is up and I haven't had any lates in 2+ years I think I am ready to start moving forward with the process. I start the FHA required First Time Homebuyers classes tomorrow  but I really want to talk to a mortgage professional to see what my chances are, what I need to do... etc.

So, my question is, with a less then stellar credit history is it better to go through a mortgage broker or deal directly with a bank/loan officer? I just need someone to guide me, someone can bounce questions off and basically hold my hand during the mortgage approval process.... Someone to say, pay down this credit card and you'll be golden or No way in hell - come back in a year.  I need a reality check!

I don't know if I should contact lenders directly or look for a broker.  How do I find a reputable mortgage broker? None of my friends or family have purchased a house in the last 10+ years so "word of mouth" isn't working for me. Any thoughts/advice/experiences are greatly appreciated!

[namvet]

Choosing a Mortgage Broker will always be your best option.  You can discuss your needs upfront and get pre-approved without charge other than the cost of your tri-merge credit report.  Mortgage Brokers are easy to locate.  If you have a realtor you can trust then inquire there.  A direct lender will give you one shot at your approval but a Mortage Broker will have many sources of funding. Good Luck!

[Shogun]

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namvet wrote:

Choosing a Mortgage Broker will always be your best option.  You can discuss your needs upfront and get pre-approved without charge other than the cost of your tri-merge credit report.  Mortgage Brokers are easy to locate.  If you have a realtor you can trust then inquire there.  A direct lender will give you one shot at your approval but a Mortage Broker will have many sources of funding. Good Luck!

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Good advice, however everyone has difference circumstances.  I used a loan officer at a bank, actually used a Vice-President and skipped the others.   She did everything possible to get the lowest interest rates, did everything I wanted, above and beyond.  So if you have a good relation with a loan officer you could go that route.

[StartingOver10]

As always Namvet has great advice. The mortgage broker/mortgage banker will have more avenues of approval for you. Each lender has their own criteria and if one lender doesn't work the broker can send it to another where it will work. Also, the LO is generally more knowledgeable than the one's found at big box banks today. From what I have seen over the past few years, the big box banks are cutting down on their expenses by having less experienced LO's on the front line. This is a problem for you and anyone that is looking for guidence in the mortgage application process.

[Trons]

As usual, YMMV.  The problem with brokers is they are going to require higher scores then a specific lender will.  Why?  Because they have to sell those loans on the secondary market and the secondary market has credit score requirements higher then a specific lender who will service the loan themselves might have.  I'll give you an example:

VA does not require a specific credit score.  They do have time on job requirements, payment history requirements, ect, not nothing related to a credit score.

If you talk to a broker, they'll require at least a 620 mid, because that's what the secondary market requires.  One broker I spoke to told me they require a 640.  Again, that probably has to do with ease of selling the loan to a full time servicer.

If you talk to a specific bank (I talked to several about my VA loan) that does their own servicing, their score requirements can be lower.  I talked to 2 big banks while shopping around, one had a mid score requirement of 600 and the other stated no minimum score requirement (but with them, I believe I was black listed because they had acquired a bank I had a foreclosure with.)

I didn't have to pay to have my credit score pulled.  Somebody mentioned that earlier.  If  LO asks for payment, I'd tell them to have a nice day.  They tend to make a bit of money if you close the loan with them so they don't need to make $24 for a credit check.

Good luck.

[StartingLifeOver]

Very interesting. I assumed mortgage brokers and LO's were pretty much one and the same.

[MrChairman]

Funny you should mention this. When I went in to do the REQUIRED app with my Ryan Homes in house mortgage broker, the LO told me it was $40 for the credit inquiry. Need I mention again, they are forcing me to apply with their in house mortgage even though I am getting outside financing. Needless to say, she never saw a check from me for $40

[jnkp2001]

USAA wants $50.00.  I never understood that either, since other companies don't want anything.

[webhopper]

I would recommend that you definately work with a mortgage broker; as they don't get paid until you're holding keys... therefore they work hard to get you approved and funded. I used a lady that specializes in government loans to do a streamline FHA refi. She "held my hand" from may til October! Best mortgage experience ive ever had. If you'd like her name please shoot me a private message and I will be more than happy to share.

[AJC1987]

Personally I went through a mortgage broker and it has been amazing.  I defintiely needed someone to hold my hand and answer my ridiculous questions on a whim.  I have my broker on pretty much on speed dial and we text back and forth each day.  The best part about the mortgage broker is that I have not had to give them any money at all in this proces so far.  The only thing I have put in is the $500 earnest money check and that was to the title company for an escrow account. 

I reccomend a mortgage broker because I went in there and said, this is how my credit is, this is how much I make, I will come in with 3.5% and will not pay any money at closing. They were all over it, they found a way to make everything work. He also got me locked in at 3.25% which I couldnt ask for any better than that.

Good Luck