Portfolio Loan - A mortgage loan that is held as an investment by a bank , rather than being sold on the secondary market. It is usually due to the
fact that the loan does not comply with the underwriting guidelines set by the secondary market investors.
Very few lenders are portfolio lenders. Very few people qualify for portfolio loans. Talk to a mortgage specialist to see if you qualify.
If you have a loan which is difficult to fund because your scenario is outside of the standard underwriting guidelines, we can often look at portfolio lenders with you and negotiate for exceptions to the underwriting rules on your behalf.
Because the default risks associated with making Portfolio Loans, portfolio lenders always charge a higher interest rate to justify the higher risks. In addition to the intrinsic risks, portfolio loans, by definition, are mortgages that lenders will hold in their portfolio for the entire loan term, and cannot resell the loan to recoup their investment capitals, portfolio loan borrowers should expect to be charged higher fees.
The are also some lenders that are not considered tradional portfolio lenders, but do have some programs that are portfolio programs only. These lenders are lending money from their own portfolios and hold onto the mortgage. A couple examples would be Washington Mutual and Bank United.
World Savings is an example of a portfolio lender. They do not sell their loans to other investors or lenders.
The underwriting guidelines for a porfolio product can be far more flexible than for a loan which is being sold to a secondary investor. This flexibility can often mean that the underwriter of the portfolio program can use a much more common sense approach when evaluating things such as past credit problems, prior bankruptcies, lack of cash reserves, etc. In some portfolio programs there is no minimum credit score requirement although the borrowers use of other credit and past credit history is a determining factor in any loan program.
There are lenders available that will keep a portion of their loans as portfolio loans and sell the rest to recoup money and continue to lend. The percentage of the loans they keep depends on the investor involved and how much funding they have.
Thee really is no benifit to the comsumer to stay with a portfolio lender other then never having to change where you send your payment. In todays modern world you can pay your bill online even if the mortgage is sold to a loan servicer. So do not be afraid of you mortgage being sold and do not let a local bank use this as a scare tactic to keep you away from mortgage brokers.
FSBO - FSBO, prononced "fizbo", is another way of saying "For Sale By Owner" It is describes home owners that sell their homes themselves and dont use a real estate agent or broker to assist them in selling their homes. Generally someone that is selling their home as a FSBO will use FSBO websites or FSBO classifieds to advertise their home.
Homeowners that choose to sell their home as a FSBO should enlist the services of a mortgage broker as soon as possible. The mortgage broker's ability to pre-qualify potential buyers for the FSBO seller can greatly reduce the number of "tire kickers" the FSBO seller must deal with personally.
It can be a crucial mistake for a For Sale By Owner seller to assume that all potential buyers will have their own financing in place. Many buyers who offer on FSBOs are working without a realtor and are not experienced in what it takes to get qualified for a mortgage. Others may have a pre-approval that really doesn't mean much. Bottom line - a FSBO should be very sure that the offering buyer is qualified to buy his home before accepting the offer. The best way to be sure - work with a mortgage person that you know and trust.
Once you've enlisted the aid of a Mortgage Broker to help qualify prospective buyers, and your house has been sold, you can continue your relationship with your broker. He/she can help you find the best interest rates for your next purchase and can help guide you through the maze of new and creative financing plans that are available.
A mortgage broker can help you by placing a sign in your yard, making fliers for any open homes that you may have and potentially bring qualified borrowers to you.
One of the best questions a For Sale By Owner seller can ask a prospective FSBO buyer is "Can you purchase the property right now, or do you have to sell your existing house before you can finance the purchase of my property"
Although selling your home FSBO rather than through a realtor can save you thousands of dollars it can also be quite a time comsuming task. To avoid wasting your time showing your home to the "just looking" crowd, ask all your potential buyers if they have been approved for a mortgage, who they have been approved with, how much are they able to put down on the home and if they have additional funds for closing. Then with a little quick math you can confirm with them the dollar amount they have been approved for.
Homeowners who choose to sell their home fsbo do not want to pay for the services of a realtor. Mortgage brokers can offer their services for free to homeowners by prequalifying any potential buyers. Mortgage brokers get paid when a loan closes so feel free to contact them if you are a fsbo.
Some mortgage brokers have the ability to list your property on their website which will give you more exposure. More exposure is the name of the game. You can also place flyers in grocery stores, office buildings and any other location you can think of even placing them on cars will increase you chances of attracting a buyer.
There are many national and local FSBO companies that for a small fee will list your house on the MLS and provide you with all the paperwork you need. It is stilla good idea to work with a mortgage broker to pre screen potential borrowers for you.
Consumers Right to Receive an Appraisal Report - You have the right to a copy of the appraisal report used in connection with your application for a mortgage loan. You must write to your lender or broker within 90 days of your application date to receive a copy of the appraisal for your home.
You have a right to receive a copy of your appraisal report. However its only a copy and the rights may belong to either the broker or the lender depending on who ordered it.
If you are having trouble receiving a copy of your appraisal report from the mortgage company, submit your request in writing and refer explicitly to your legal right to receive and their obligation to furnish this report.
The appraisal will have a detailed analysis on the value of your home, as well as recent sales of comparable homes in the vicinity.
Choosing the right loan program - There is not a one size fits all formula for selecting the "RIGHT MORTGAGE LOAN" for you and your family.
There will be many factors that will come into consideration
Your current financial picture
How you expect your finances to change
How long you intend to keep your house
How comfortable you are with your mortgage payment changing
There are so many loan programs from 30 year fixed , 15 year fixed, arms, baloons, interest only, and many more. The best way for you to make the best decision will be to meet with a mortgage broker and discuss your finances, your plans and financial prospects, and your preferences.
One of the most popular loan programs of the last two years is the Payment Option ARM or Hybrid Pay Option ARM Adjustable Rate Mortgage, also called the 12 Month MTA. With deferred interest rates beginning at as low as 1.00% and the ability to pay off the loan at the pace of your own choosing, these are still incredibly popular mortgage loans for investors and customers looking to purchase or refinance their home morgage.
Often your loan program will change when your needs change. A good broker will custom the loan to fit your needs.
When choosing the right loan program, it is important to look at the bigger picture surrounding your finances. Many consumers tend to fixate on the 30 year fixed programs because they have not been properly exposed to the numerous loan programs that are currently availible to them. Factors such as length of time you plan on being in your home, your current credit situation, current debt, and income will play a large role in selecting a tailor made loan program to suit your needs.
Choosing the right loan program is just as important as the interest rate associated with a loan. The loan program that is right for you may not be right for someone else. Each borrowers situation is different depending on many factors. These factors need to be looked at in their present state as well as with an eye toward the future. There are many programs available through mortgage brokers that a borrower may qualify but choosing the right loan for your situation is important to your lifestyle and financial well-being.
Not knowing the industry, most people will lean toward choosing a 30 year fixed rate program. But if you only intend to live in the property for 3 to 5 year before moving up or refinancing the loan you can save thousands by choosing an arm or Hybrid loan program.
When choosing your loan program , your first consideration should be how long you plan to stay in the home . The second is if you plan to pay off the mortgage, how quickly you want to pay it off . Other considerations may include job stablity, Cash Flow, and future goals.
If you want to move into a home with a price slightly above what you can afford now, and you expect your income to increase in the next few years, a mortgage with an "Interest Only" feature may be what you need. With an "Interest Only" mortgage, the borrower makes monthly payments for the accrued interest, none for paying down the principal. Therefore, the monthly payments are lower than that of a fully amortized mortgage. The "Interest-Only" loan allows a home buyer to purchase the house he otherwise cannot afford.
Title & Escrow Fees - Title & Escrow Fees
Include both the owners and the lenders policy of title insurance as well as the escrow fee. Title insurance protects both the buyer and lender by insuring a clear chain of title, that the persons with the legal right to convey title to your property are the ones who have actually done so. Also, some polices protect against the occurrence of fraud and forgery.
The escrow fee is a service fee charged by the title company for acting as an independent third party in facilitating your transaction and insuring that all parties to the transaction perform as contractually agreed to.
Other title fees include the fee to notarize your loan documents (the notary fee) the fee required to record your deed of trust with the county recorders office (the recording fee), as well as miscellaneous drawing, courier and express mail fees.
You may call the title company handling your purchase, provide them with the purchase price and loan amount youre requesting and they can supply you with an accurate fee quote based on the specifics of your transaction.
Your total fees for both title and escrow will be disclosed on your HUD-1 statement.
Title and escrow fees come into play when the seller accepts a buyer's offer and both the parties "open escrow" with a title or escrow company or attorney.
An escrow account holder is a neutral third party which holds onto, then exchanges, disburses and transfers deeds, documents and monies. Disbursements pay off existing loans and the agent records deeds, prorates property tax payments and interest and helps with the transaction's other transfer details.
Most of the money associated with a home purchase is channeled through the escrow account including a buyer's deposit, fees for the escrow account itself and related services, title insurance and title search fees, the mortgage money and associated fees, the real estate agent's commission, recording fees, filing fees, transfer fees, notary fees, courier fees and a host of others.
All these costs become "settlement costs" recorded on the U.S. Department of Housing and Urban Development's HUD-1 "Settlement Statement" or a reasonable facsimile, which discloses all of a housing transaction's costs for both the buyer and the seller.