Happy funding, Rudi
Would you buy your 1st House at an Open House? Would you buy a new Ford without checking the Chevy? Would you buy a computer from Office Depot without looking at Apple?
I believe and hope, "No" would be the answer to these questions.
As was mentioned, work with someone you like and trust who can educate you about all the complexities of purchasing real estate and financing real estate.
There is a lot to learn and you have asked several questions which require dialogue with anyone of these professionals.
Do your homework. And write down all these questions and call and continue to ask any and all questions after you walk away from your initial appointment with any of these professionals.
Do your homework and get educated!
Happy Mortgage Hunting,
The Investor's Broker
First, I recommend you use a real estate agent/broker to help you on your purchase because they are going to know the market and help you avoid things you may not be aware of, and I wouldn't use the listing agent/broker as your rep because you want someone exclusively looking out for your interests.
You do not have to use a particular lender of your agent/broker, but usually the lenders they regularly refer people to are good because they want to refer to someone who makes them look good and takes good care of their clients. And you will likely get more VIP treatment if you come in as a referral because they know future business depends on it. We regularly work with three lenders who offers different types of programs for different types of buyers, and they take very good care of our clients.
The other thing that will serve your interests better is that a referred lender should be less likely to make you promises they can't deliver on, and there is little more annoying in the real estate world for a buyer than going through the process on a property, spending money on appraisals and inspections, etc... and then finding out you can't get a loan.
These days the best agents/brokers are a fantastic source for lenders, contractors, and other industry professionals. Take advantage.
Lance King/Owner-Managing Broker
You shouldn't just go with the first loan officer you speak with - they may very well be the one you eventually go with but in my opinion you should explore at least 3 options, preferably at least 1 mortgage broker, 1 mortgage loan officer who works for a bank, and also one that would work at a smaller direct mortgage lender (not a broker, and not a bank, just a mortgage lender who arranges loans and sells them afterwards - usually to the banks)... it wouldn't be a bad idea if you had the time to interview up to 6. That way you can get a feel for how each does business, because not every mortgage broker is the same as another mortgage broker, etc.
You'll want to ask what the pre-approval process entails and how long it takes. Will the underwriter who will be allowing your loan to close be the person reviewing your file as part of that process? Will it just be the loan officer reviewing your information? Will they even ask you for documentation?
You'll also want to ask what types of programs they offer, and once your documentation has been thoroughly examined you'd want to get what options would then apply to you, as well as ask what your loan officer thinks would be the best loan program for your situation.
You'll want to ask what type of fees & costs you could expect to incur along the way (credit report, earnest money deposit, home inspection, appraisal fee, closing costs, etc.), how much those costs are estimated to be, and when they are expected to be paid (at the time the service is performed, at closing, etc).
You'll also want to ask what type of loan terms can they offer you if you were to lock in your interest rate today.
You should also ask when & how they will be available - are you someone who likes to discuss things after the normal work hours on the phone? In person on a Saturday? Through email?
There are more variables to think of, some will be important to you and others will not, however I truly believe that you will have a feeling inside of you of pure comfort when you have found the loan officer who will be the perfect fit. You will leave the conversation having a full understanding of the road ahead and what is expected of you, as well as you'll feel the loan officer has left no stone unturned when going over your situation.
You should definitely look at different loans and difference loan officers.
The quotes on Loans can vary greatly; the proof of a good loan is written on a GFE (ggod Faith Estimate).
I can recommend a great loan agent; Shane Milne; firstname.lastname@example.org
He is honest and he knows what he is doing. He's not too far from you in Orange County.
Good luck and may God bless
Here are some questions to ask your loan processor:
1. What would be my fixed rate today?
2. How long would my rate be locked in?
3. What are your up front (out of pocket) loan fees?
4. How many loans have you closed in the past year?
5. Could you give me a list of references/recommendations?
6. What is the best part of your service?
7. What could you improve on?
If you consult at least two MAJOR lenders you should be ok.
Best of Luck to you!
Kawain Payne, Realtor
There are also loans for special types of REO's that also only require 3% down and right now, there is a special incentive that if you close by the end of September, you can get a 3.5% seller credit. As others have suggested, you need to really talk to a few different referrals for lenders and/or MLO's. As your friends and relatives if they know lenders or MLO's that they would recommend. For those of us who are good at what we do and who treat our clients well, our friends, relatives and past clients have no problem referring us to those they know.
The 3.5% down payment loan is a valid loan under the FHA. The rates on FHA loans are very competitive right now. If the home is a foreclosure where the loan is owned by Fannie Mae or Freddie Mac and the house is in need of some repair, these two agencies of the government will allow a low down payment loan similar to the FHA in many cases. E-mail me for further details at: financialbrokerssL@gmail.com
But, on the other hand, if you're a sophisticated investor looking for a good deal on a buy and hold you wouldn't even be asking this question. I say go for it. Interest rates have never been this low and after we get through screwing things up in DC come 8/2/11 they may never be this low again in your lifetime.