Things you should know about:
You should know...
An appraisal of real estate is the determination of the present value and rights of ownership. The appraiser does not create value, he/she simply interprets the market value of a property at a given time. As the appraiser compiles the various data needed to complete an appraisal report, consideration is given to the site and amenities, as well as the physical condition of the property. Considerable research and the collection of data must be completed prior to the appraiser arriving at a final opinion of value.
There are three common approaches used to derive the opinion of value. The first approach is called the COST APPROACH. This method is used to determine what it would cost to replace the existing improvements as of the date of the appraisal, less any physical deterioration, functional obsolescence and economic obsolescence. The second method is the COMPARISON APPROACH, which uses comparable sales data from recently sold properties (comps) of similar size, quality and location to determine the market value of a property. Finally, the INCOME APPROACH is used to appraise rental properties and has little use in the valuation of single family dwellings. This approach provides an objective estimate of what a prudent investor would pay for a commercial property based on the overall net income (return on equity) the property produces.
You should know... Everything possible about your real estate mortgage. You should understand the whole process and feel comfortable every step of the way. That's where we come in. First, we hope our website can help you understand things more clearly. And second, We are always available to answer your questions.
We will help you learn what you should know in order to make the best mortgage choices. We are easy to reach and very willing to explain everything from start to finish. If we don't know the answer immediately, we will find out and get back to you right away. We are no pressure people with lots of patience and we want to help you feel comfortable with the whole process.
We hope the information and tools on these pages will help answer at least some, if not most, of your questions. Use the buttons on the left side to easily surf this site. Start with this page to learn about the people and entities you will deal with.
Please note: Most mortgage websites use pre-designed cookie cutter templates and add only the loan officer's name and contact information. On this site, almost all of the information is in our own words, based on our personal knowledge and training.
Remember, we am happy to help you with any other questions you might have. Just call our vendorss
How we do business:
When you compare different lenders make sure you are comparing apples to apples. If you are comparing costs, get them in writing. When you are comparing rates, compare them on the same day (because rates change daily) and then compare the costs being charged to get those rates.
We also believe that your best choice should be based not only on the numbers but also on your personal psychological tolerance. Can you sleep at night with an ARM not knowing where the rates will be in 12 years? Or, will you sleep better knowing you are moving in 5 years and aren't locked into a loan (with a higher rate) for 25 years? We want you to be totally comfortable so that you will sleep like a baby knowing that you have the right loan at the best rate and at the lowest costs.
Please know that as complex as the mortgage business is, there will be those rare difficult situations and occasionally something might go wrong. We are totally committed to doing our best for every one of our customers to overcome any obstacles and provide the best service at the lowest possible cost, with honesty, integrity and respect. Most of all, when you call us we will be there for you or we will call you back immediately.
Who are the people and entities involved in the process of getting my loan?
The Borrower: This is you. You are a retail customer.
The Loan Officer: Also known as loan originator, LO, loan consultant. A loan officer must work for either a bank or a mortgage broker. As of 2005, a loan officer working for a mortgage broker in the state of Illinois must be licensed. A loan officer at a bank does not necessarily need to be licensed.
The Processor: The processor works for the mortgage broker (or in some cases the bank) and is responsible for getting your loan package ready to submit to the underwriter for final approval. This person will coordinate information and verify documentation submitted by the loan officer.
The Underwriter: The underwriter will look over all documentation in your loan file. If further information or documentation is needed the underwriter will request it. When everything meets the underwriter's requirements, the approval will be issued and a closing date can be set.
The Mortgage Broker: This is a company that employs loan officers to sell loans to borrowers. The mortgage broker works with many wholesale lenders and outside sources of money, such as banks or private investors. Because mortgage brokers work with so many different wholesale lenders, they can find mortgages for people with all different situations and at the lowest rates and costs.
The Realtor (real estate agent): Realtors can represent the buyer or seller of a property. The "listing" Realtor receives a commission from the seller and shares it with the Realtor that brings the buyer to the seller. In reality, both Realtors are working for the seller because that is where the commission originates; however, both realtors have an interest in making a fair deal for both parties so that the sale will be made.
The Appraiser: The appraiser is hired by the buyer to assure that the lender is getting enough collateral for the loan.
The Title Company/Agent: The title company is a third party that performs several functions. It issues title insurance, handles the closing paperwork and records the deed. This is what insures that the property has no liens (anything from the past history of the property that could restrict it from being owned by you), and that everything was in order at the closing and afterwards. The title company is chosen by the seller of the property and is paid from the title fees charged to the borrower.
The Wholesale Lender: This can be a bank or a private institution that provides mortgage financing to Loan Officers. Each lender has its own nuances and specialties. For example, some are only interested in customers with great credit while others love people with poor credit. Some have really low prices on ARMs but are high on fixed rate loans. Your loan officer will find the best lender for your situation.
Banks: We all know what banks are because we all have savings accounts where we deposit and store money. Banks lend this deposit money to people needing mortgages and other loans. Of course they try to make a higher interest rate on the money they are lending than the rate they pay their depositors. Banks lend money directly to their banking customers who meet specific criteria. They also have wholesale divisions that loan money to the customers of mortgage brokers.
The Secondary Market: Mortgage lenders, including banks, have funds that they use to loan money to borrowers. When they make a loan, they earn money by collecting the lender fees. As they continue to make loans, they deplete their available funds. Unfortunately, they now have less money to make new loans for future customers. In order to build up their funds again, they sell their loans on the secondary market to gigantic government regulated organizations like Fannie Mae or Freddie Mac. Fannie & Freddie get their money by issuing government bonds to the public. So, if you buy a government backed mortgage bond, as an investor, your money is ultimately funding mortgages. Since these agencies, Fannie Mae, Freddie Mac, etc., are very particular about the loans they sell to their investors, the loans they buy from banks and lenders must conform to their own strict standards and thus are called conforming loans.
The Servicing Department or Servicing Company: The servicing of your mortgage includes collecting your monthly payments and usually (unless you waive escrow) paying the taxes and insurance on time to protect the lender. A small part of the interest you pay monthly goes to pay for the cost of servicing your loan. Servicing your mortgage is done by either the servicing department of the lender or by selling it to a third party servicing company.
We will help you get the best loan at the lowest cost, with quick & easy closings.
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