A mortgage broker is not an employee of a bank. We work on behalf of the borrower and act as intermediaries. Rather than you going to shop various lenders, we work for you; we utilize many different wholesale lenders to find the most appropriate terms and conditions for your mortgage.
Benefits for Consumers - Mortgage Brokers increase competition among lenders which ultimately benefits consumers. Lenders must offer attractive rates and terms which lowers overall costs compared to having just one lender that can set any conditions or terms.
Benefit for lenders -Mortgage Brokers benefit lenders by helping increase their market share through another channel of obtaining clients. Additionally, lenders can extend their reach without brick and mortar branches that require ongoing expenses and upkeep.
Mortgage Source is a family-owned small-business serving Pennsylvania since 1998. Our team-based approach helps ensure we cover all options for each of our borrowers.
A mortgage pre-approval letter represents verified borrower data; it includes a credit check, recent pay stub examination and review of W-2s.
A pre-qualification letter is given by some lenders after borrowers submit their information. A pre-qualification does not include any third-party verification of that information. Often, the information submitted to obtain the pre-qualification is inaccurate.
For that reason, Mortgage Source only gives pre-approval letters. A pre-approval letter represents verified data and shows sellers that your offer is serious and strong. If a seller receives identical offers, it may come down to a pre-approval versus pre-qualification.
A loan originator will review your income, assets and liabilities to be pre-approved.
Here is a list of items we would review:
A credit score is a number ranging from 300-850 that depicts a consumer's creditworthiness. The higher the credit score, the more attractive the borrower. A credit score is based on credit history: number of open accounts, total levels of debt, and repayment history. Lenders use credit scores to evaluate the probability that an individual will repay loans in a timely manner.
Credit scores generally fall into the following ranges:
Excellent: 800 to 850, Very Good: 740 to 799, Good: 670 to 739, Fair: 580 to 669, Poor: 300 to 579
Your credit report must contain at least one account which has been open for six months or more, and at least one account that has been updated in the past six months for you to get a credit score. If you do not meet the minimum criteria for getting a score, you may need to establish a credit history prior to applying for a mortgage.
With a fixed-rate mortgage, the interest rate stays the same throughout the duration of the loan. With an adjustable-rate mortgage (ARM), the interest rate will change periodically, most typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change through the life of the loan.
During the early amortization period of a fixed-rate loan, a large percentage of your monthly payment goes toward interest, and a much smaller part toward principal. That gradually reverses itself as the loan ages. You might choose a fixed-rate loan if you want to lock in a low rate. If you have an Adjustable Rate Mortgage (ARM) now, refinancing with a fixed-rate loan can give you more monthly payment stability.
You might choose an ARM to take advantage of a lower introductory rate and count on either moving, refinancing again or simply absorbing the higher rate after the introductory rate goes up. With ARMs, you do risk your rate going up, but you also take advantage when rates go down by pocketing more money each month that would otherwise have gone toward your mortgage payment.
The Annual Percentage Rate, APR for short, is a tool for comparing different loans, which will include different interest rates but also different points and other loan terms.
The A.P.R. is designed to represent the "true cost of a loan" to the borrower. This prevents lenders from "hiding" fees and upfront costs behind low advertised rates. While it is designed to make it easier to compare loans, it is sometimes confusing because the A.P.R. includes some, but not all, of the various fees and insurance premiums that accompany a mortgage. You can use the A.P.R. as a guide, but you need a mortgage professional to help you find the truly best loan for you.
There is no simple formula to determine the type of mortgage that is best for you, but we can help you decide which is most useful in your unique situation. This choice depends on several factors including: your current financial picture, how much you want to put down, how long you intend to keep your house, etc. Mortgage Source PA can help you evaluate your choices and make the most appropriate decision.