What type of Mortgage Company is best for you?

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Pete Thompson is an Illinois Mortgage Broker who provides superior mortgage service and competitive mortgage rates in Chicago, the Chicago area and throughout Illinois.  How to Save Thousands when Buying a Home and Getting a mortgage.

What type of Mortgage Company is best for you?

If you are in the market for a mortgage, you are probably planning to shop around to get the best mortgage rates and fees. You probably have a type of loan in mind, and you certainly have a goal in mind for how the financing will meet your needs. There are a lot of things to consider when shopping for your mortgage, but one thing most people neglect to check on, is what type of company their mortgage company is. There are three types of companies that do most of the mortgages both here in Illinois and throughout the country: banks, mortgage banks and mortgage brokers. Each type of mortgage company has advantages and disadvantages. Knowing how each operates will give you the information you need to choose the company that is right for you and your needs.

The first place many homebuyers look is their local bank. Banks are in the business of making loans, so it is normal to think they would be a great place to start. Most banks do offer mortgages, but mortgages are a sideline, not a specialty. You may find that the same person who is handling the car loans also does the mortgage lending. Because banks aren’t their specialty, getting a loan from a bank may take longer than it would through a mortgage broker or a mortgage banker. With many banks the loan has to go through the loan committee to be approved. If you have are trying to close quickly a bank might not be your best option. Because mortgages are not their main business, it is also common for banks to be priced higher than mortgage bankers or mortgage brokers. On the other hand, sometimes you can get a loan approved through your local bank that might not fit the underwriting guidelines that mortgage bankers and mortgage brokers go by. And if you need a home equity loan, the local bank is probably your best option.

Mortgage brokers are another option to look at. Mortgage brokers are pure middle men who get paid by bringing loans to outside investors (usually big banks). The mortgage broker will take in the loan application, process the documentation and send the loan out to the investor for the underwriting and loan approval. At closing, you will close the mortgage with the end investor. Mortgage brokers can often bring in loans cheaper than the banks could do it with their own branches, so mortgage brokers have become a big factor in the market. A good broker can have a variety of different lenders that they work with, so they can find the lender who matches up best with each borrower’s situation, and their prices are usually very competitive because they see which lender offers the best rates on any given day. The disadvantage of a mortgage broker is that too many brokers, and often the ones quoting the lowest rates, may not be around long enough for you to close your loan with them. The financial requirements for becoming a broker are low (You need a $40,000 net worth in Illinois), and any time there is a shakeup in the industry a lot of small, and sometimes big, mortgage brokers bite the dust. If your loan is in process when this happens you may loose any money you put in and have to start the process over.

The other main option is the mortgage banker. Like a mortgage broker, the mortgage banker is a specialist who does only mortgage loans. The difference between mortgage brokers and mortgage bankers is that the mortgage banker will handle every aspect of the loan themselves, so they will process the loan, underwrite it and fund the loan with their own money. Because they have more control, mortgage bankers are usually able to close loans faster. Because they are taking on more responsibility, they are also able to get better pricing, so their rates and fees are going to be very competitive also. Most of the FHA loans are done by mortgage bankers who again are able to control the process. Mortgage bankers are usually bigger companies and they have to be stronger financially, which gives you more safety. The biggest disadvantage of dealing with a mortgage banker is that they are often tied in with one source of funds, so their pricing may be very aggressive at times, but out of the market at other times.

There is one other type of mortgage company to look in to, the mortgage banker/ mortgage broker hybrid, such as the company I work with. These companies are mortgage bankers in that we control the entire process and handle everything from taking the application to preparing the closing documents, and the loans are all closed in the mortgage companies name and with their own funds. The difference is that with a hybrid mortgage banker, they have many sources of financing. For example, we have over 60 different wholesale lenders we deal with, and like a mortgage broker we can lock the loan in with the lender with the best pricing who fits the borrower’s needs. After we close the loan with our own funds the loan will be shipped off to the lender it was locked in with. In a way they have the best features of both mortgage bankers and mortgage brokers.

So when choosing who to work with, do a little more digging and find the company who will work best for you.

How to Save Thousands when Buying a Home and Getting a mortgage? For information on the latest mortgage news and a breakdown of current Illinois mortgage rates, please visit Chicago Mortgage Rates and News.


Shares in Irish Banks Drop

Shares in Irish banks dropped sharply today as a series of US and European bank failures sparked fears that the massive bailout plan in the US may not be enough to deal with the problems in the mortgage and banking sector.

Shares in AIB in particular were down more than 45% at one point, while Irish Life & Permanent fell by more than 30%.

First Time Home Buyer Tips

If you are looking to become a first time home buyer you may be overwhelmed with the idea of buying your first home. This is not at all uncommon. Buying your first home can be nothing short of a daunting task. You need to come up with a substantial down payment, many areas in the country are still way overvalued, and you have to qualify for a loan. There are a few first time home buyer tips that may just help you achieve the American dream.

First you need to think procuring enough capital for a decent down payment. It’s important to remember that if you put 20 percent or more down you achieve the all important 80/20 loan to value (LTV) ratio. Why is this important you may ask? We’ll if you have an LTV ratio of 80/20 or better you won’t be required to pay private mortgage insurance (PMI). Saving on PMI will allow you to afford more house or simply lower your monthly payments. PMI is mortgage protection insurance that protects your lender and not necessarily you. So, avoiding it only helps.

The government has allowed for a few benefits that can help you with the down payment, First, you can utilize retirement funds from your IRA, 401k, or other qualified accounts if you qualify as a first time home buyer. You are, however, limited to $10,000 towards your first time home purchase. Every bit helps though, and this may be a source for funds that you didn’t consider.

Another government program allows you a $7,500 tax credit if you’re a first time home buyer. This program has been introduced to encourage home buying during the current hosing mess. Before you get too excited about free money, it does have some restrictions. First, you must purchase between April 9, 2008 and June 30, 2009 to get the credit, so it’s short lived. Secondly, it’s not really a tax credit in the traditional since. The first time home buyer tax credit must be repaid over a period of 15 years. It is also capped at certain income requirements.

It’s important to do your home work as a first time home buyer. There are certain grants and aid available based on your state of residence. The FHA, Fannie May and Freddie Mac all offer first time home buyer programs that allow you to purchase a first home with rather minimal down payemnt requirements. Take a look at their web sites to see their latest offers.

Filing for Personal Bankruptcy

Prior to filing for personal bankruptcy it is important to make some initial considerations. Are your debts dischargeable in bankruptcy, whether you want to keep part or all of your debt and the cost you may incur during bankruptcy. Also you may wish to consider the potential future impact it might have on employment and your ability to borrow money or start a business. It may affect your ability to purchase a house should you have to move.

Check with a credit counselor whether or not your debts are dischargeable. They will be able to advise you whether or not your debts will be affected by debt relief.

A secured debt is is secured by collateral, much as a mortgage or car loan. Most consumer debts are unsecured eg card debts, medical bills, legal fees, and utility bills. Secured debts are not ordinarily discharged in insolvency unless you surrender the collateral.

As strange as it may sound, you may not wish all of your debts to be resolved through the bankruptcy. You may not wish to lose your car for example.

You may wish to consider if the reason behind you going bankrupt will stop when you become bankrupt, or will they actually get worse. For some lifestyles it may not help.

Most people choose between a Chapter 7 (“Straight Bankruptcy” or “Liquidation”)  and a Chapter 13 (“Wage-Earner Bankruptcy”) bankruptcy. To find out the difference between these contact a debt counsellor or do further research.

If you do wish to file for personal bankruptcy or this article has made you have second thoughts consider contacting a debt counselor such as www.PayingPaul.com

Questor: Few Irish eyes are smiling at Bank of Ireland

Bank of Ireland is short of cash. Although it is not in such dire straits as HBOS and Bradford & Bingley, it desperately needs a huge injection of capital to fund an increasingly unhealthy loan book.

Read the rest of the article here

Value of new mortgages down 16% this year

THE VALUE of new mortgages advanced in the three months to June dropped 13 per cent, bringing the decline for the first half of this year to 16 per cent, new figures reveal.

Tighter lending rules and declining demand amid falling property prices and higher bank funding costs have brought activity in the mortgage market in value terms below levels last recorded in 2005, according to statistics pooled by the State’s mortgage lenders.

Read the rest of the article here

Bank of Ireland to close down eight high-street mortgage stores

The Bank of Ireland is to close down The Mortgage Store – its chain of eight mortgage branches.

Read the full article here

Homes at risk following high mortgage increases

Many struggling mortgage holders face repossession following recent mortgage rate increases according to an article in today’s Herald.

Mortgage Ireland Launched 18th August 2008


Irish Property Blog – Mortgage Ireland Launched as Beta

Mortgage Ireland (https://mortgageireland.wordpress.com/) will officially launch this week on the 18th August 2008.

The website aims to provide up to date Mortgage News and Information to Irish consumers and brokers, as well as an Irish Mortgage Directory.

Mortgage Ireland will run in Beta for the first 3 months whilst it gathers advertisers and syndication partners.

Also launched will be Mortgage Ireland’s sister website Property Ireland (http://propertyireland.wordpress.com/).

Both websites will initially be in Blog format until they gather sufficient investment to move to new servers.


Mortgage Ireland website address: https://mortgageireland.wordpress.com/

Property Ireland website address: http://propertyireland.wordpress.com/

Media / Advertisers Contact: mortgageirelandmagazine@googlemail.com

Lender puts 50pc mortgage limit on rural purchases

According to an Article in the Irish Independent mortgage lender First Active has limited mortgages in rural areas of Ireland to 50% of the property value.

They will now only approve larger mortgages in cities such as Dublin, Cork, Galway, Limerick and Waterford.

Read the full article here

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