As a Realtor and residential developer, I am often asked what the best method is to select a mortgage lender. Your choice begins with whether you want to work with a direct lender or with a loan broker. My preference is with a direct lender, however, there are distinct advantages to both, and ultimately it will come down to your personal preference. Regardless of which direction you go in, make sure your lender pre-approves you for your loan rather than just prequalifying you. The pre-approval comes after the lender has sent your file to an underwriter or processor who physically checks your income, credit and employment history. Your approval will only be subject to an accepted offer, clear title and a favorable appraisal. Prequalification, or often referred to as a DU (desktop underwriter) qualification, is not a loan approval, but a calculated pre-qualification solely based upon what a borrower tells the interviewer.
Many mortgage companies refuse to do this work upfront, but the good ones do, and I only send my clients to these kind of lenders. The last thing I or anyone involved in the transaction wants is to have our client's heart broken in escrow when the loan you supposedly were approved for gets rejected for a reason that could have been addressed before making any offers.
Here is a great article originally published by Bankrate.com and subsequently republished by The Orange County Register that offers the pros and cons to each choice.
Looking for real estate services? If you, or a friend or relative is looking for a new home, commercial building or lease, have them give me a call at (714) 584-5509, or send me an email at frank@resusa.org. There are a variety of listed and unlisted opportunities for investors and first time home buyers alike. Let me know how I can help.
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