Mortgage from Mortgage lender or Bank?
Filed in Chinese Drywall Feedback on Apr.29, 2010
What’s the difference between getting a mortgage from a privately owned Mortgage Lender (or specifically, what do they do that the bank’s reps can’t?) and from a bank? Which is recommended?
And also, with so much scam going on (and the chinese drywall situation), what are some good tips to find a trusted realtor?
April 29th, 2010 at 7:57 pm
hey, I suggest u see http://www.ebiznus.com for this.
I hope this will be resolving your problem you can also browse more for this on answers.yahoo.com but i think you better look at what i suggested instead of wasting ur time.
Best of luck.
April 29th, 2010 at 8:27 pm
If by “mortgage lender” you mean a mortgage broker, a broker just shops around with different lenders (banks) for what is supposedly the best deal (and charges you a fee for doing so). When your loan closes, it will be immediately sold to a bank. Brokers do not carry loans on their books.
April 29th, 2010 at 9:12 pm
Private lenders (ie, private money) typically get higher interest rates than a bank. Prime + whatever does not apply.
Generally people use private money for 3 reasons:
1) Money is quicker to get then from a bank.
2) Better mortgage brokers qualify borrowers re credit checks, loan to value, ability to carry, and registering the lien with the city, (all these things a bank also does). But a broker may not follow the loan formula banks use for lending, ie, your monthly loan payment should be no more than roughly 1/5 of your monthly income.
3) Brokers may not require as much asset/liablity info most banks require (ie, dragged over the coals).
This might sound risky to a private lender, but private money also uses a simple first trust/max 65% loan to value formula that – even in a depressed economy – the lender would not loose money if they had to take over the property and sell for the note. A lawyer also drafts and closes the mortgage.
btw, I loan money for private mortgages – anywhere from $50K to $1mil.
I use the above 65% formula, get 12% on my money, and sleep ok.