When you are buying a home, you are not paying me. Your closing costs don't include my commission! I get paid by the real estate seller, no matter who the seller is and if it's my listing or not.
The same applies to new houses and new construction - The Builder pays me to represent my clients at their new home centers. And you know what, it does not take away from any incentives, discounts, builder bonuses or anything the builder would offer you without having my expert eyes on the process!
When it comes to borrowing money to buy real estate, there are a few things you should know.
Main Line Banks
First - there are three types of lenders in the world. Main line banks - Wells Fargo, B of A, Chase, Citi, etc... They lend money from their own sources to people wanting to buy real estate. Some think they may be to cumbersome to do the "tricky" loans with clients that have higher levels of debt or that are self employed. As stated, "Some" think that :)
Second - Mortgage Brokers are those who can pull on money from the mainline banks, but also have access to more sources of money. In some cases, they have access to more than 200 sources of money. This makes them quite nimble and able to serve most. "Some Think" that using a mortgage broker costs more money in the way of origination fees(up front costs) or via higher interest rates than the Main Line Banks. This, in my experience, has not been the case. That's way I want my clients to ask for a Good Faith Estimate each time!
Third - Credit Unions and Direct Lenders. Non Main Line banks who lend money to people. They are a bit more flexible than most and are typically made up of individual people that want to invest in mortgages. They can lend without having to live up to Federal Banking Guidelines and Rules. While they cannot break the law, they may be more forgiving to a member that has had some bad luck, financially, in their past!
Questions to ask a Lender:
When interviewing a lender to obtain a home loan you will want to ask for documentation related to the conversation you had with them.
If you discussed some "program" or "discount" you'd be receiving that is "out of the ordinary", make them give it to you in writing.
If they won't, send them an email message recapping the discussion and offering and get them to respond. This will serve you well!
1. Ask if you give them your information, social security and all financial documents, if they will give you a complete copy of your credit report to have.? (we explain why in our face to face meeting with our clients)
2.Ask them to give you a Good Faith Estimate. This is a break down of your costs to have them obtain a loan for you. Make sure it shows different financial scenarios. Example, if you are using an FHA loan, see what a 3% conventional loan will cost. (explained more in our real estate educational meeting)
3. Did I talk about getting stuff in writing? This is very important. I'd ask the lender if they understand your concern and also if they'd be willing to include recaps of conversations held on the phone in an email.
There are others, but these are the biggies! We talk about others during our Crash Course on Real Estate meeting held in our offices!