1st Time Home Buyer
Things to consider when buying a home
A mortgage is actually an investment agreement between you
and the lender. The lender fronts the cash for a property and you promise a
return on the money. The lender reserves the right to sell the property in the
event you can't fulfill your obligations in the agreement.
Do I use a bank or a mortgage broker?
Bank
The person you deal with at the bank is a loan officer. Their entire job is to
checkout your credit and process your loan. In many cases this comes across cold
and impersonal. The loan officer is working from a checklist established by the
bank. You either fit into the requirements or you don't. These requirements are
established by the bank and have very little flexibility.
Mortgage Broker
Mortgage Brokers shop for the best mortgage fit for the client. They get
paid a fee for each mortgage processed and it is in the broker's best interest
to provide a mortgage to you. They will shop with many mortgage lenders
providing greater flexibility to you. Look for reputable mortgage brokers. Since
their pay is based on a fee, undoubtedly there are some who try to get you into
a mortgage with the highest commission.
Get pre-approval
Find a lender to help you get pre-approved.
This process will help you determine the actual mortgage amount and type of
mortgage for which you will likely qualify. It gives you the information you
need to help you make proper decisions. The pre-approval process is not a
mortgage nor a loan. It is documentation used in helping you find the right home
to fit within your budget.