For A Home Mortgage Loan Reputation Make A Difference
Posted by Craig
April 29th, 2008
Finance
To obtain a traditional home mortgage loan there are many steps to go through and having a real estate agent on your side can help have the decision made quicker on the application. When a person finds a house they would like to buy, many real estate agents can help fill out the home mortgage loan application and some will even take it to the bank for the hopeful homeowner.
While the real estate office may help with the application, gathering information and verifying nothing is missing, they do not have any role in the home mortgage loan approval process. Nor do they conduct credit checks and employment and income verification. In many states this may be considered a conflict of interest as the agent, whose fee depends on the sale, will be in a position to gain financially if the house is sold.
The staff at the bank working on the home mortgage loan will be the ones who check all information for accuracy and conduct all the income verifications. They will also be the ones deciding whether the loan is approved or not, but a word from the real estate agent can influence their decision, as long as it is on behalf of the buyer and in no way offer financial incentives for the loan approval.
Banks Not The Only Source Of Mortgage Money
There are online business offering advice and limited help to someone selling their home. The fees are considerably less than traditional real estate brokers, and the personal service is severely limited. Most are based on the premise that sellers and buyers are willing to forego the service and do a lot of the work themselves, if it results in a savings of commissions.
In this same line, there are online vendors willing to accept applications for a home mortgage loan, again without help from the traditional lending institutions. Many offer reduction on closing costs and interest rates and in many cases there are no “points” charges, typically part of the banking fee for processing the paperwork and loaning money with an interest charge.
Buyers need to carefully read over any home mortgage loan contract to be sure they understand all the terms and conditions. Any part that is not understood needs to be questioned and if the loan appears to have parts that are not in the best interest of the buyer can be turned down, without being penalized.
With the current state of the market I think a lot of people will try to save on commissions and not worry about the service. In reality this is probably a time when home owners and buyers really need to seek advice and get all the help they can.
Posted on April 30th, 2008 at 8:34 pm
In my opinion, there is a huge negative with the online mortgage brokers. First off, which you noted, you get very little ‘personal’ service. Also, recently we saw a problem with Lending Tree employees selling off their customer information to third party lenders.
Posted on May 1st, 2008 at 2:07 pm
Craig,
You give good advice for home buyers. Recent stricter underwriting guidelines in the mortgage industry make it more important than ever to work with an upfront and reliable mortgage professional. Today’s pending home sales report for March illustrates this point, as the decline is due in large part to denied loans.
Jim Bisnett
Posted on May 7th, 2008 at 3:47 pm
I completely disagree with your statement that a real estate agent may have the ability to “sway” a lender. In my 20 years in real estate lending, I have never had an instance where the lender’s underwriter would even care what the real estate agent’s opinion is.
Lenders care about four things - Creditworthiness, Income, Assets and Value - That’s it!
Posted on May 9th, 2008 at 5:13 pm