So you just got pre-approved for a great rate
- don’t break out the champagne quite yet.
Were you aware that when you need a loan, the person that you deal with does not approve your loan?
Just as in real estate, the State of Florida requires a licensed professional between you (the borrower) and the sellers (the lenders).
If you go to a bank for a loan, this licensed middleman, or “matchmaker” is called a loan officer – and at a mortgage company it is a broker. Both have the same goal – to get your loan approved by a lender, so that they can earn commissions.
Since you must use a “matchmaker”, make the most of it.
The first thing that borrowers normally do in their search for a loan is to shop for the best interest rate.
However, the interest rate is the last step in the loan process for lenders.
So, it behooves you to understand the logic that lenders use when approving your loan:
1. Lenders look to your “matchmaker” to screen personal information that you provide them. First, the “matchmaker” will verify your FICO credit score. Developed by Fair Isaac & Company, FICO is the mortgage industry standard which pulls your credit scores from the 3 major credit bureaus and evaluates your lifetime history of on-time and delinquent payments
2. After completing this preliminary background check, your “matchmaker” prepares federally approved forms known as the Mortgage Loan Application and Good Faith Estimate, and submits them to lenders
3. Lenders confirm the worthiness and legitimacy of the personal information on your loan application. Extensive research occurs with online public databases and validation letters to employers and banks, past and present, to qualify your :
• Citizenship status
• Home and work addresses and phone numbers
• Employment earnings, overtime, bonuses, tips
• Income from real estate and investments
• Bankruptcies, foreclosures, collections, liens, judgments
• Child support and alimony
4. Finally, lenders lose money when your monthly mortgage payment is late. Lenders want to lend money to borrowers who are willing and able to make monthly payments on-time. To protect their profits, they calculate the probability that your payment will be timely. Each lender has their own competitive algorithm. In other words, no two lenders lend the same, as your interest rate is customized based on your financial habits. This is the reason that some of us get a 6% interest rate quoted on the same day that others get 7.25 %
Now that you understand the loan process, you can appreciate how critical the role of your "matchmaker" is in getting you the best interest rate and terms. Tell them the good and bad upfront and they will present you to the appropriate lenders.
In fact, you should consider talking to a mortgage professional before house hunting.
Getting pre-approved or pre-qualified is the process whereby the “matchmaker” estimates approximately how much you can borrow. This helps you to negotiate your sales price.
The point to remember is that pre-approvals and pre-qualification do not lock in an interest rate. Initially, your "matchmaker" must help you understand the loan products available for your financial status.
Your purchase options materialize once your application is submitted to those with the gold (the lenders) and you receive a personalized interest rate and terms from a lender.
Most important to the home seller is that being pre-qualified is like walking into their house with a suitcase full of cash to make a deal ! They won't have to wonder if you are wasting their time.
Sellers will be more apt to sign a sales contract and will take their property off the market knowing that you will qualify for a mortgage.
And this is where we come in - Florida Mortgage Warehouse is a new paradigm. We bring you into the mortgage process more efficiently and faster.
In other words, we maximize your precious time, as you work with us passively - anytime - on the internet - to provide confidential and personal information in a 100% secured environment - and we present it with the utmost integrity and effectiveness to lenders.
Florida Mortgage Warehouse takes pride in educating borrowers from around the world on the most affordable loans throughout the State of Florida for residential, vacation and investment properties.
Now, enjoy the in-depth knowledge in our site.