Using a Certified Loan Broker provides you with substantial advantages that traditional mortgage brokers do not have. These advantages can be seen in four important categories: Training, Product Knowledge, Customer Service and Pricing. Lets talk about TRAINING first.

To fully understand this advantage you must first know how a Certified Loan Broker differs from a mortgage broker. A Certified Loan Broker is the elite of the mortgage industry. A Certified Loan Broker is thoroughly trained and certified by the nations oldest and largest loan broker training company. Most people would be surprised to find out just how little formal training the average mortgage broker / loan officer actually has received. Certified Loan Broker training helps to ensure that the person handling your loan has access to the most current information and lending techniques available in the market. Also, unlike traditional bank loan officers, Certified Loan Brokers receive substantial training on how to help borrowers whose credit is “less than perfect, as well as those with good credit.” Because of this training, Certified Loan Brokers are often able to close loans that other mortgage brokers could not. Whether you’ve had trouble paying your bills, are new on your job or just a little short on the down payment, a Certified Loan Broker is your best opportunity to get the loan you need. In addition, Certified Loan Brokers are not restricted to only handling your personal financing needs. If you are self employed a Certified Loan Broker can also help to arrange equipment financing, SBA loans, commercial real estate loans and even finance your accounts receivables. In other words, a Certified Loan Broker is the only source you will need for almost any type of loan or lease.

Providing you with a superior level of customer service is equally important to a Certified Loan Broker. For this reason a Certified Loan Broker will spend all the time necessary to provide you with a custom financing solution that is right for you. Once your application is started, a Certified Loan Broker will represent you throughout the transaction so that you can focus on more important things. Certified Loan Brokers also maintain contact with you throughout the loan process so that you never feel “out of touch” with your own loan. In fact, Certified Loan Brokers regularly provide their clients with status reports to help keep you informed. At every step throughout the transaction, you will know the status of your loan. If you have ever been through the mortgage loan process, then you know that this is not normally the case. Most borrowers will endure the entire loan process wondering what exactly is going on, or trying to get answers from other people involved in the deal because their loan officer is never available. Certified Loan Brokers understand the value in providing a superior level of customer service and are focused on keeping you involved every step of the way.

In addition to their knowledge and desire to make your loans go smoothly, a Certified Loan Broker will give you access to the most aggressive rates and terms available in the market. Since Certified Loan Brokers have the ability to work with hundreds of lender programs nationwide they can offer you more options than you may have thought possible. Also, because Certified Loan Brokers access “wholesale money” they can provide the same programs that major banks offer and pass the savings on to you. It is also important to note that a Certified Loan Broker does not get paid unless they are successful in funding. This means they will review your request and present it in a manner that poses the greatest probability of funding. As such, Certified Loan Brokers have a tremendous motivation to ensure that there are no hidden costs or fees that other mortgage brokers often charge you at the last minute. By choosing to work with a Certified Loan Broker, you are working with the elite of the mortgage lending industry.

Even the most experienced homebuyers have difficulty understanding the relationship between the interest rate and the points or fees associated with their loans. The reality is that the two are directly related in that “points” are nothing more than interest that is charged up front. The actual rate and number of points a borrower pays is largely dictated by the quality of the borrowers credit. As the credit quality decreases, the interest rate, points and fees increase. This is because these loans are more difficult to fund and pose a greater risk of default to the lender.

Here are some issues to consider:

• Often the price of a home mortgage loan is stated in terms of an interest rate, points and other fees. A point is a fee that equals 1 percent of the loan amount. Points are usually paid to the lender, mortgage broker, or both, at the settlement or upon completion of the escrow. Often, you can pay fewer points in exchange for a higher interest rate or more points for a lower rate. Ask your Certified Loan Broker about points and other fees.
• A document called the Truth in Lending Disclosure Statement will show you the Annual Percentage Rate (APR) and other payment information for the loan you have applied for. The APR takes into account not only the interest rate, but also the points, mortgage broker fees and certain other fees that are associated with your loan. Also, ask if your loan will have a charge or a fee for paying all or part of the loan before payment is due (prepayment penalty).
• A lender may require you to obtain certain settlement services, such as a new survey, mortgage insurance or title insurance. It may also order and charge you for other settlement-related services, such as the appraisal or credit report. A lender may also charge other fees, such as fees for loan processing, document preparation, underwriting, flood certification or an application fee. You may wish to ask for an estimate of fees and settlement costs before choosing a lender. Some lenders offer no cost or no point loans but normally cover these fees or costs by charging a higher interest rate.
• If you see advertisements for lenders offering extremely low rates, don’t be misled. Most of the time these very low rates refer to the starting rate on an adjustable rate mortgage or graduated payment mortgage. In other cases, the rate advertised may be for a balloon loan. This is a loan where the remaining balance will have to be paid off early. An example of this is called a 30 due in 5. In this type of loan your payments are based on a 30-year term to make them affordable. The remaining balance of the loan however, must be paid off at the end of the 5th year. This means that you will probably have to refinance the loan or sell the house at the end of 5 years to satisfy the debt. Locking in your rate or point at the time of application or during the processing of your loan will keep the rate and/or points from changing until settlement or closing. Ask if there is a fee to lock-in the rate and whether the fee reduces the amount you have to pay for points. Find out how long the lock-in is good, what happens if it expires and whether the lock-in fee is refundable if your application is rejected.
• Finding financing that you can live with for the next 30 years in serious business. Ask about alternative kinds of mortgages in your area. Compare rates, down payments, and closing costs among different types of lenders. Here is where a Certified Loan Broker can save you time and money. There is no single nationwide mortgage rate; interest rates can vary according to the amount of the mortgage, the length of the loan and from lender to lender. Look at the entire package that’s being offered, including the fine print about penalties and assumptions. The more knowledgeable you are about the loan process, there will be fewer surprises in store for you at closing.

One of the most common questions a Certified Loan Broker answers is, “should I choose a fixed or adjustable rate mortgage (ARM)?” The answer depends on many different factors including your income at the time of qualifying, the lender you are working with, current market conditions and how long you plan to stay in the house.

Lets talk about your income first. Many first time buyers who are in the beginning stages of their careers will choose an adjustable rate over a fixed rate. The main reason is that, while the interest rate on the adjustable will likely increase over the coming years, the borrowers level of income can outpace the increased monthly payments. For this reason, adjustable rates tend to be the loan of preference for new college graduates who are beginning work in the field they studied. On the opposite end of the spectrum are high-income borrowers and real estate investors. These people tend to prefer adjustable rates because of the opportunity to make reduced monthly payments. High-income borrowers will then either invest the difference between the fixed rate and ARM payments, or use the starting period when the rate is very low to apply large amounts of money to the principle balance. This will enable them to pay off the loan faster and minimize future payment increases since they will be financing less money.

Because of the lower initial interest rate, adjustable rates result in a lower mortgage payment than the standard fixed-rate mortgage. This lower monthly mortgage payment can assist a borrower with high debt ratios in qualifying for a larger mortgage. This allows a borrower to increase their purchasing power in order to buy a more expensive home.

If your income is not an issue, the next thing to consider is the lender that you choose for your loan. Some lenders actually prefer to write adjustable rate loans because, over the long run, it will provide them with more interest income. Because there is an additional profit in the loan, ARM lenders may make it easier for you to qualify. This is where your Certified Loan Broker can be particularly helpful. Because Certified Loan Brokers work closely with many lenders, they know which lenders prefer to do fixed or adjustable rate loans and can steer your loan in the proper direction.

Another issue to consider is the current real estate market conditions. When interest rates are down, many lenders are apprehensive to offer ARMs because it is more difficult to find investors. The opposite is also true when interest rates are higher. This is also an area where a Certified Loan Broker can be particularly helpful since they are actively engaged in the real estate market and know the current trends.

The last issue to consider in deciding between fixed and adjustable rates is how long you intend to occupy the property. As a general rule of thumb, most people will be better off with a fixed rate if they plan to be in the property for more than five years. At that point, your interest rate for an ARM will usually have increased substantially so your payment will be much higher than if you had taken a fixed rate. On the other hand, if you are planning to stay less than 5 years, then the thought of buying 30-year money is probably not very appealing. Also, as we have already discussed, if you put extra money to principle when your interest rate is low it will help to keep large payment fluctuations in check. You should also consider that adjustable rate mortgages have built in safety measures known as “caps” that will help limit how high your interest rates can rise per year. Most adjustable rates are structured so that the annual interest rate cannot rise by more than 2 percent per year, although some loans have caps that are even more conservative. Other loans will not regulate the interest rate at all but instead limit how high the payment can rise each year. You should consult with a Certified Loan Broker to help you determine if a fixed or adjustable rate loan is right for you.

The most important thing you can do to help yourself with the approval of your home loan is to go through the pre-qualification process with a Certified Loan Broker. The loans that give lenders the biggest challenge are with borrowers who should have taken the time to be properly pre-qualified in advance. This can also give you important guidance about the best loan for your personal financial picture. It will often save you time, money, and in some instances, the heartache of being denied your home loan.

If you are properly pre-qualified before you buy a home, the entire loan process can be simplified. Certified Loan Brokers are experts at helping you with this very important part of the loan process.

It is much easier to shop for a home loan if you know in advance what you can afford. You can make arrangements with a Certified Loan Broker to be “pre-qualified” for your loan.

Here’s how to do it:

• Complete the pre-qualification screen on this website.
• A Certified Loan Broker will contact you to review your specific needs. At that time, you will be able to discuss different financing options and decide which type of loan is best for you.
• If you desire they will write you a pre-qualification letter that will let your REALTOR®, as well as the seller of a property, know that you have been counseled and should be a preferred purchaser.

It is a good feeling to have the pressure of worrying about the loan behind you and know that you can concentrate on finding that “dream home.”

As a pre-qualified buyer, you will have stronger bargaining power when making an offer on a house. A seller that is certain you can afford the house is more likely to accept your offer.

Sellers often request a “pre-qualification” letter before they will accept a contract. This letter does not disclose any personal information about you but will give the seller some security about your ability to complete the loan process. You also can obtain full loan approval before you buy. The only contingency remaining would be the appraisal for the property.

We always suggest that you be pre-qualified or fully approved before you buy. It makes your contract offer much more attractive.

When lenders evaluate a borrowers credit they look at several different areas. The first, and most obvious, is whether or not you satisfy your financial obligations on time. This is important because lenders view this as a preview of how you will repay any loan they make to you. In addition to the punctuality of your payments, lenders also look at your credit “depth.” Too often consumers will accumulate large amounts of debt in a very short period of time. For this reason most lenders want to see a minimum of 2 years established credit before they will consider you as a candidate for a home loan.

Also, in recent years lenders have begun using “Credit Scoring” as a tool in qualifying for loans. A credit score is a computer-generated number that lenders use to help determine how great a credit risk you are. When calculating your score, the computer looks at many risk factors. The ultimate score that is issued is a three-digit number that can range from the low 200’s to the high 800’s. The higher your score is, the greater the probability that you will satisfy the debt in question. The majority of the population scores between the high 500’s to the high 600’s. Those people with credit scores over 700 are generally considered to be “A+” credit.

One of the benefits of having a Certified Loan Broker evaluate your credit lies in their ability to service more than just the “A” credit market. The majority of Americans will experience some form of credit difficulties throughout their life. Certified Loan Brokers can offer loan programs to borrowers with a prior bankruptcy or tax lien. A Certified Loan Broker is your best chance to get the loan you need if you have experienced credit problems.

There are many other areas which lenders will review to determine credit worthiness. Many times this information becomes the deciding factor when it is applied to a marginal borrower.

Lenders look primarily at the last 2 years when reviewing credit reports. If you are requesting an “A” quality loan, then you should have no more than 10% of your total credit report delinquent in the last 2 years. This rule, of course, may not apply to all borrowers depending on your overall credit history. However all borrowers should not have missed any mortgage or rent payments in the last 12 months if you want the most competitive rates.

Lenders also consider certain types of credit derogatories to be more severe than others. It is important to remember however, that any derogatory information existing on the credit report will require a detailed explanation. The following is a “scale of importance” used by lenders when viewing credit derogatories:

• On Mortgage Loans, there are very few excuses lenders deem acceptable for missing a mortgage payment. Lenders will view these derogatories as a preview of how they can expect to be repaid.
• With Auto Loans, most people need their car to get to work each day. Most people need their job to make their mortgage payment. Therefore, lenders feel that if you are missing your car payments, you are jeopardizing your income, which is essential for repayment of their debt.
• A Personal Loan is secured by a personal guaranty of repayment (Commonly called Signature Loans). Sometimes there is additional collateral taken such as “household goods” but the primary security for this type of loan remains your “Word of Honor.”
• Revolving Debts, such as credit cards, usually do not have fixed payment terms. Instead, the payment represents a percentage of the existing balance, which can vary greatly from month to month. Because the terms are unstable, lenders are slightly more forgiving towards a borrower with minor delinquencies of this type.
• The most serious delinquency is on an existing mortgage. This includes first or second mortgages and any other real estate loan. Since the applicant’s loan request is for a new mortgage obligation, the existing mortgage payment history is regarded as a direct indication of the manner in which the borrower will handle the proposed mortgage obligation. Most guidelines indicate no more than one 30-day late payment on a mortgage obligation can be reported within the past year. Even in the case of one mortgage delinquency, an acceptable explanation must be provided, and there must be no other serious credit problems. A Certified Loan Broker however has loan programs to match almost any credit history.
• Consideration is often given to applicants with past credit problems that have been brought current and have established that a re-occurrence of credit problems would be remote. Some of the more acceptable credit explanations relate to medical difficulties, job termination or changes beyond the applicant’s control, and in some cases, divorces. With the exception of bankruptcies, negative credit ratings remain on most credit bureau files for seven years. Bankruptcies remain for a period of ten years from the date of discharge.

It is important to get an opinion of your personal credit history from a Certified Loan Broker since every situation must be reviewed on its own merits.

A refinance is the replacement of your current home loan or several loans (such as first lien and second lien) with a new loan. The property and borrower are the same: the financing is the only thing that changes.

There is very little difference in the processing procedures of refinancing an existing mortgage and applying for one to purchase a new home. Your loan request must be processed thoroughly and all credit documents ordered. Many borrowers assume that since their existing mortgage has been paid on a timely basis, they automatically will be accepted for a new mortgage. However, with the exception of an FHA streamline mortgage, a new mortgage usually means new credit approval.

Refinancing a mortgage usually covers all the costs associated with a new mortgage loan. This cost of refinancing will usually take the first 1/4 to 1/2 percent of the interest rates improvement, depending on the size of the loan. Since the costs are relatively fixed, it is easier for a larger loan to absorb these costs than for a smaller loan.

There are many reasons for you to consider refinancing your existing mortgage. The most common reason is to benefit from a lower rate. People also refinance to reduce their monthly payment, reduce their loan term or to take cash out of their home. An individual many also be unhappy with the terms of their existing mortgage. Their existing mortgage many contain a balloon payment forcing an early payoff. People often have refinanced to obtain an assumable mortgage for easier resale of their home at a later date.

A mortgage refinance should be the easiest loan a Certified Loan Broker can generate for you. If properly presented, they often have a high probability of closing. The reasons for this success stems from the fact that there is only one party involved in the transaction.

The Certified Loan Broker will communicate all of the loan requirements and help you with the details that are necessary to get your loan closed. Included in this list would be things as simple as termite inspection or as complex as comparable sales data for the appraiser.

To help determine when they should refinance their mortgage, many people use the “2% rule.” This means that they will only refinance their current loan if they can achieve an interest rate reduction of at least 2%. The reality is that whether or not you should refinance is determined by several factors of which the interest rate is only one. Your paramount concern in refinancing your loan should be how long you plan to live in your current home. If you plan to be there for a long time, say 10 years, then reducing your rate by as little as 1% can still have a tremendous benefit. You should also consider the term of the loan as well. Most people do not even consider 10, 15 or even 20-year loans when refinancing. These shorter-term loans allow the lender to reduce your interest rate since you will be paying the loan off faster. Because your loan balance has also declined since you first purchased your home, this combination could allow you to pay off the new loan in half the time with only a small change in your payment. When in doubt, check with a Certified Loan Broker to see what is best for you.

Title insurance is a form of insurance that is designed to protect lenders and property owners from any potential hidden claims against a property. If, for example, you purchase a home and later someone contends the sale was invalid, title insurance protects against any possible resulting losses.

Two main types
There are two main types of title insurance. The first is the type that lenders require to take out when you apply for a mortgage to protect themselves against any potential loss on the loan amount as a result of title issues. This insurance expires when the loan is paid off. The second is personal title insurance that is designed to protect you, the buyer, against any such losses. While optional, it is advisable as it protects your own investment interest. Personal title insurance remains in place the entire time you own your property.

Why it's important
Whenever property is bought or sold a title search is conducted to ensure that the person making the sale is the legal owner. Occasionally, however, oversights can occur. Perhaps the owner has unpaid property taxes and the local county has put a lien on the property. Or maybe the property is co-owned by a seller's ex-spouse and he or she neglects to have this person sign the deed transferring the title. In cases such as these, if a dispute occurs because a title search was faulty, title insurance covers the cost of settlement and any ensuing legal fees.