Understanding Home Mortgage Loans
One of the advantages of working with an exclusive buyer’s agent is that the agent has a legal duty to help you find a home mortgage loan with the best rates and conditions for your particular home buying situation. Exclusive buyer agents seek out and cultivate relationships with mortgage brokers and lenders with the best rates and terms in the marketplace.
Two agencies assist lenders as resources for home mortgage loans, the Federal Home Mortgage Lending Corporation (FHMLC) and the Federal National Mortgage Association (FNMA) commonly referred to as FreddieMac and Fannie Mae. Whether the lender source is a bank, credit union, savings and loan institution, or mortgage bank, these agencies only purchase mortgages that conform to their standards (guidelines).
The basic principles of mortgage lending for understanding home mortgage loans are based on the following information:
- Credit score of borrower which provides historical evidence of his willingness and ability to pay his financial obligations.
- An analysis of the borrower’s ability to repay the mortgage based on the monthly payment, including property taxes and insurance on the property, plus existing monthly bills in comparison to existing and projected monthly income.
- A review of the borrower’s liquid finances of the most recent sixty days from the time of application.
- An independent appraisal of the property conducted in accordance with Fannie Mae and Freddie Mac guidelines.
When it comes to home mortgage loans, one size does not fit all, so a government loan may be a better choice. FHA, VA, and FmHA mortgages offer some benefits not seen in conventional financing no money down or small cash layout, lower interest rates, long loan terms, and no prepayment penalties. But these loans which are targeted for specific types of home buyers take longer to obtain and may have low maximum mortgage amounts for your marketplace.
Having an experienced professional counseling you will help you identify the right kind of ‘mortgage product’ for your needs and to get a best rate and terms on your home mortgage loan.
FOR HomeBUYERS, Inc. is an Exclusive Buyer Agency working 100% for Buyers. To learn how Exclusive Buyer Representation can benefit you during the home buying process contact us by calling or texting 919-219-9878 for a free, no obligation consultation.