If you want to purchase a home, you will likely require a mortgage lender to help you pay for the property. Mortgages make it possible to spread the payments out over many years, instead having to pay for them out of pocket. Mortgage lenders can be private individuals, banks or credit unions. Some Houston mortgage lenders partner with the U.S. Department of Housing and Urban Department (HUD) that provides programs to help people purchase homes. Before you apply for your FHA home loan, it is imperative you understand the different roles played by different mortgage lenders.
Negotiating the Mortgage Contract
One of the primary roles of the mortgage lenders is to negotiate your mortgage contract. The process of negotiating for your mortgage contract may take long, depending on the type of mortgage you want, type of house you want and the special requirements you have. Some critical factors discussed during the mortgage contract negotiating process include payment period, interest rates, prepayment penalties, refinancing fees among essential details.
Handling the Underwriting Process
Underwriting is the process of determining your eligibility for the home loan. Some mortgage lenders handle the underwriting themselves while others outsource the process to outside companies. The underwriter will make a recommendation as to how much they should allow you to spend on the property in total as well as what your interest rates margin should be. Some critical factors the underwriter will take into account during the underwriting process include your credit history, monthly income, work history, and assets.
Appraisal, Inspection, and Surveying
Your mortgage lender will have your dream home appraised and inspected to ensure that they are not lending you more money than what your home is worth. In addition, the mortgage lender may hire a surveyor to clarify the property lines. In some cases, the mortgage lenders may not handle these activities, and may instead ask you for a proof to show that you took care of them.
There are many other critical roles played by mortgage lenders. To get the best mortgage services, you must make sure that you choose the right mortgage lender. Consider factors such as reputation of the company, types of loans available, interest rates, payment methods and prepayment penalties when choosing your mortgage lender.