Where Should You Get a Florida Home Loan? Should You Use a Mortgage Broker?

Confused as to where to acquire financing for a new home? Wondering if you should utilize a mortgage broker, or what you should look for in a Florida home loan provider? Dr. Don Taylor of Bankrate.com weighs in with some helpful tips.

Generally, mortgage brokers are the first choice for “story loans,” or when borrowers have to sell a lender on their situation in order to get a loan approved. A broker can do a better job in finding good financing for you in certain situations than you can do for yourself. If you go this route, go with a mortgage broker that bills itself as such — an upfront broker.

However, if you have good credit, a good income and aren’t looking to do anything too exotic in building or financing your home, you might not need the services of a mortgage broker as much as you think. Using the web, you can look at the current Florida home loan rates in your area and compare lenders without filling out multiple loan applications.

Keep in mind that the mortgage market is divided into three pieces:

1. Loan origination.
2. The loans themselves.
3. Mortgage servicing.

The breakdown is simple, but many people don’t get it. The origination stage takes you to closing, the mortgage lender provides the funds at closing, while the servicer manages the loan payment stream. It’s common for different financial institutions to specialize in one mortgage lending aspect, and uncommon for originating lenders to keep your loan in their portfolios.

The originating lender may sell both the loan and the servicing to the secondary market. The Real Estate Settlement Procedures Act requires a mortgage servicing disclosure statement, delivered to the homeowner during the loan application process, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender.

As for private lenders, shopping for private loans is most likely to come about if you’re working with a mortgage broker. Check out the FTC “Facts for Consumers” guide to learn more about this, and educate yourself on the various types of mortgages available to borrowers before you get the ball rolling. You can also apply above for a free discussion!