MORTGAGE FINANCING

For many homebuyers, mortgage financing is a critical element in their purchase of a new home. Fortunately, there is an abundance of mortgage financing options available to potential homebuyers. The first challenge for a homebuyer is to select the best financing option for their unique situation. The second challenge is to select the best source for their new mortgage financing. For a home purchase, the challenge of selecting the best source for their new mortgage is critical. Select the wrong source for financing and the buyer could find their home purchase (as well as their earnest money) in jeopardy.

The desire to obtain the lowest interest rate possible on new mortgage financing is only natural and appropriate. However, it is also important to evaluate the closing costs associated with the new mortgage financing as well as the performance history of the mortgage lender. A great rate is of little benefit if the mortgage lender charges excessive closing fees or fails to process, approve and fund the loan in time for final closing.

In so much as mortgage lenders are not licensed ( registration is now required ) or effectively regulated in The State of Colorado, it is imperative for a buyer to select a reputable and competitive mortgage lender with a proven track record of success. One of the basic decisions is the choice between a mortgage broker and a mortgage lender. A mortgage broker is a facilitator between the borrower and the lender. A mortgage broker can tap into a large source of potential lenders. A mortgage broker is compensated by the lender as well as by additional closing costs paid by the borrower. A mortgage lender or direct lender is a mortgage company that processes, approves and funds the loan with their own in-house staff and money.

The selection of a mortgage lender as well as the best financing option is influenced by a buyer’s unique qualifications, needs and objectives. Factors that effect the selection are the buyer’s credit score, amount of down money, employment history and anticipated length of ownership of the new home. Although the selection of a mortgage lender is your decision, I will be happy to provide information on established, competitive and respected mortgage lenders.