Mortgage Resource Guide
Lenders and Brokers
154 articles10 sections
Understanding Brokers
- What Is a Direct Lender? A direct lender approves your mortgage, funds it at closing, and is named on your note. Banks, credit unions, and non-bank lenders can be one; a broker cannot.
- What Is a Mortgage Broker? A mortgage broker is a licensed loan originator who arranges your loan with one of several lenders but does not lend; the lender approves and funds it.
- Who Pays the Mortgage Broker? Either the lender pays the broker, and you cover it through your rate, or you pay the broker a fee at closing. Federal rules bar both on the same loan.
Choosing a Broker
- How Do I Decide Which Mortgage Broker to Use? Shortlist two or three brokers, confirm each license on NMLS Consumer Access, ask about their lenders and pay, then compare written Loan Estimates.
- How Do Mortgage Brokers Find and Select Mortgage Loans? A broker quotes only lenders that approved it; under a federal safe harbor it checks 3 or more and shows you the lowest-rate and lowest-points loans.
- How Should I Prepare Before Meeting with a Mortgage Broker? Bring two years of income records, recent pay stubs and bank statements, and a debt list, and decide your price range, down payment, and how long you'll keep the loan.
Choosing a Lender
- How Do I Choose the Best Lender for My Mortgage?Start here Get Loan Estimates from at least three lenders of different types within about two weeks, then pick the lowest cost over the years you expect to keep the loan.
- How Does a Lender Evaluate Properties? Through an appraisal: a licensed appraiser the lender picks values the home from recent similar sales and checks its condition, and the lender lends on that value.
- Should I Get a Mortgage from a Bank or a Non-Bank Lender? Get quotes from both. Non-bank lenders make most home purchase loans and far more FHA and VA loans; banks and credit unions keep more loans and make most HELOCs.
- What Are the Disadvantages of Taking Out a Loan from Private Lenders? Private and hard-money loans cost more (9% to 13% plus up to 3 points at two public lenders), come due in 1 to 3 years, and skip most consumer-loan rules.
- Who Are the Best Mortgage Lenders for First-Time Buyers? The best lender is one that offers the program you qualify for, such as FHA, VA, USDA, HomeReady, Home Possible, or a state HFA loan, at the lowest cost.
Working With Brokers
- Can a Mortgage Broker Offer FHA, VA, or USDA Loans? Yes. A broker can arrange FHA, VA, and USDA guaranteed loans, but a lender approved by each program must underwrite them. Jumbo access depends on its lenders.
- Can I Still Use a Mortgage Broker If I Have Bad Credit? Yes. A broker can shop lenders whose minimum score fits yours, but program floors still apply, such as FHA's 500, and a low score raises your cost.
Rates & Fees
- Should I Lock In My Interest Rate? Lock once you have chosen a lender and know your closing date, for a period that runs past closing. Locks often last 30, 45, or 60 days; longer ones usually cost more.
- What Is Included in Lender Fees (Origination Fees)? Lender fees are the Section A origination charges on your Loan Estimate: points plus application, underwriting, and processing fees. They cannot rise without cause.
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