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Finding The Best Direct Mortgage

Any time you have the ability to eliminate the middleman, you save money.  If you were looking for a mortgage broker to do all of the legwork of running down the various lenders who would possibly fund your loan, you would in a sense be hiring a middleman.  By doing it yourself, following these easy steps, you can get the best direct mortgage available.

The Brokers

First of all, not all of the brokers have agreements with all of the various lenders in the state in which you live.  That is because the lenders expect a certain amount of business from each of the brokers that packages loans for them.  Before the meltdown, brokers would shop a loan around to various direct lenders in order to find one that would agree to fund the purchase of the property.  Many unscrupulous brokers took advantage and created straw buyers and provide false information that was supposed to be verified.  This caused many problems for the lenders and now they’ve tightened things up.

The Property

There are leasehold properties and fee simple properties.  The difference is the ownership of the land, not the house or structure that is on it.  Many lenders will not fund a mortgage loan on a leasehold property.  So the first step is to eliminate those lenders from your list.

The List

Creating a list of lenders is easy. To start, check locally first.  Most local or regional newspaper throughout the country publishes weekly interest rates by all of the lenders doing business in the area.  They often show the current rates for ARM’s, 15 year and 30 year loans along with the points required to get that interest rate.

The second part is to check with the big national banks that fund loans for mortgages such as Bank of America, Wells Fargo etc.  Many of these are often skipped over by the newspaper editors because they are out of the area or may not have a branch locally.  The same is true with the large financial institutions that lend directly such as Merrill Lynch, or Smith Barney.

The Process

Go through your list and call each of the lenders to see if you pre-qualify for a loan.  It may be time consuming but by the time you go through just 5 or 6, you will have a really good understanding what each of these lenders requires for the best direct mortgage loan.  Make sure you let them know about the property that you’re planning to purchase since this is an important consideration in determining your qualification.  Remember the direct lenders are loaning money to you using the property as collateral.

Start by getting as many of the national lenders as possible since they are the most competitive.  In the end, you will have a choice from the lenders as to the best mortgage loan for your new home.