Frequently Asked Questions

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Are mortgage brokers lenders or bankers? Neither. A broker is a real estate financing professional acting as an independent contractor. The range of products and services offered through brokers, and by brokers, is evolving rapidly. There are circumstances when brokers may act as bankers, funding their loans however, the majority perform origination services up to the point of funding.
Do brokers work for the wholesale lender or the consumer? Neither. As an independent contractor, the broker allows wholesaler lenders to cut origination costs by providing such services as preparing the borrower's loan package, loan application, funding process, and counseling the borrower. Brokers help keep loan rates low due to their minimal overhead and setup costs. Furthermore, the broker will seek the loan which best suits the borrower's financial circumstances, needs, and goals. From the consumer perspective, with rare exception, the broker does not get paid unless and until the loan closes. Thus, the broker has the ultimate incentive to provide the best possible customer service to the consumer.
Does the mortgage broker really care about the quality of the loan itself? Yes, absolutely. The safety and soundness of the mortgage lending community is directly linked to the success and integrity of its home loan originations. Furthermore, mortgage brokers represent the single largest residential origination source today, emphasizing that they play a significant role in the mortgage loan process. These numbers highlight the fact that consumers who exercise their choice, choose mortgage brokers; most likely because brokers are dedicated to their customers: consumers, wholesale lenders, and ultimately, American tax-payers.
How can I find out about my credit history? To find out about your credit standing you may wish to contact the three major credit reporting companies. Experian 1-800-682-7654 Equifax 1-800-685-1111 Trans Union 1-800-916-8800 A charge ranging from $5 to $20 dollars may be assessed for each copy of your report.
How do I find a Lender? You can finance a home with a loan from a bank, a savings and loan, a credit union, a private mortgage company, or various state government lenders. Shopping for a loan is like shopping for any other large purchase: you can save money if you take some time to look around for the best prices. Different lenders can offer quite different interest rates and loan fees; and as you know, a lower interest rate can make a big difference in how much home you can afford. This is where a good TAMB member mortgage broker can help you. Use our 'SEARCH FOR A TAMB MEMBER' tool to find a quality Broker in the your area.
How do I know if I can get a loan? Use our simple mortgage calculators to see how much mortgage you could pay - that's a good start. If the amount you can afford is significantly less than the cost of homes that interest you, you might want to wait awhile longer. But before you give up, why don't you contact a TAMB member Mortgage Broker. The'll help you evaluate your loan potential. A good broker will know what lenders are offering and can help you choose a one with a program that will be right for you. Another good idea is to get pre-qualified for a loan. That means you go to a Broker and apply for a mortgage before you start looking for a home. Then you'll knowhow much you can afford to spend, and speed the process.
How much money will I need to buy a home? Well, that depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house. When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies. The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. Closing costs - which you will pay at settlement - average $2,00 to $3,000. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise.
I'm a single mother. How would I go about buying a home? Although you won't have the benefit of two incomes on which to qualify for a loan, there's no reason that you can't become a homeowner. Become familiar with the process, pick a good real estate broker, and think about getting pre-qualified for a loan. Also, ask your realtor to see if there are any local homebuying programs that could help you.
Should I use a real estate broker? How do I find one? Using a real estate broker is a very good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you'll want to know about a neighborhood you may be considering...the quality of schools, the number of children in the area, the safety of the neighborhood, traffic volume, and more. He or she will help you figure the price range you can afford and search the classified ads and multiple listing services for homes you'll want to see. With immediate access to homes as soon as they're put on the market, the broker can save you hours of wasted driving-around time. When it's time to make an offer on a home, the broker can point out ways to structure your deal to save you money. He or she will explain the advantages and disadvantages of different types of mortgages, guide you through the paperwork, and be there to hold your hand and answer last-minute questions when you sign the final papers at closing.
What is RESPA? RESPA stands for the Real Estate Settlement Procedures Act. RESPA covers conventional mortgage loans on one-to-four family properties, as well as government insured and guaranteed loans. It requires lenders to provide borrowers certain settlement cost and loan information throughout the loan process (i.e., the Good Faith Estimate, Settlement Cost Booklet, HUD-1). RESPA also sets forth certain requirements for loan servicing and escrow accounts. The statute further protects borrowers by prohibiting kickbacks and referral fees which may increase costs in the settlement process. Further information can be found on HUD’s web site at http://www.hud.gov/offices/hsg/sfh /res/respa_hm.cfm. You may also call HUD’s Customer Service Center for a copy of the helpful brochure 'Buying Your Home.' The number is 1-800-767-7468.
What is the role of the realtor? Frequently, the first person you consult about buying a home is a real estate agent or broker. Although real estate brokers provide helpful advice on many aspects of home buying, they may serve the interests of the seller, and not your interests as the buyer. The most common practice is for the seller to hire the broker to find someone who will be willing to buy the home on terms and conditions that are acceptable to the seller. Therefore, the real estate broker you are dealing with may also represent the seller. However, you can hire your own real estate broker, known as a buyer’s broker, to represent your interests. Also, in some states, agents and brokers are allowed to represent both buyer and seller. Even if the real estate broker represents the seller, state real estate licensing laws usually require that the broker treat you fairly. If you have any questions concerning the behavior of an agent or broker, you should contact your State’s Real Estate Commission or licensing department. Sometimes, the real estate broker will offer to help you obtain a mortgage loan. He or she may also recommend that you deal with a particular lender, title company, attorney or settlement/closing agent. You are not required to follow the real estate broker’s recommendation. You should compare the costs and services offered by other providers with those recommended by the real estate broker.
When does an ARM make sense? An ARM may make sense If you are confident that your income will increase steadily over the years or if you anticipate a move in the near future and aren't concerned about potential increases in interest rates.
Why do I need a home inspection? Aren’t the physical deficiencies noted in the appraisal? Appraisals are prepared for lenders; home inspections are for you, the buyer. Home inspections give you detailed information on the physical condition of your new home. For more information and a helpful brochure on home inspection call 1-800-217-6970.
Why should I buy, instead of rent? You'll love the feeling of having something that's all yours - a home where your own personal style will tell the world who you are. But there's more to owning a home than personal satisfaction. You can deduct the interest on your mortgage from your federal income taxes. And interest will compose nearly all of your monthly payment , for over half the years you'll be paying your mortgage. This adds up to hefty savings at the end of each year. And you're also allowed to deduct the property taxes you pay as a homeowner. If you rent, you write your monthly check and it's gone forever. Another financial plus in owning a home is the possibility its value will go up through the years.