Murrieta Real Estate Mortgage Lenders for your Murrieta Home. Back to Communities - Murrieta Homes

Mortgage Lenders

You have taken the preliminary steps toward getting ready to buy your Murrieta home. You have analyzed your current income and budget and have made updates or corrections as needed. You have tried to anticipate the expenses of moving into and living in a new home. You have used these calculations to narrow your choices about what type of Murrieta real estate you can afford comfortably. You have learned the rudimentary facts about mortgages, interest rates and down payments, and you have looked into mortgage preapproval.

Before you start hunting for your Murrieta home, however, you still have some research to do and decisions to make. You need to think about who is going to help you. Have you investigated lending institutions and their programs? Have you selected a Murrieta real estate or property agent, or are you planning to work without an agent? Do you need an attorney?

These are your resource people, and you should decide if and how you want to use them. Each brings a different perspective to the process of buying your Murrieta home, and you need to understand what each has to offer you. Take some time to explore your general options at this point in the process so that you will be prepared to make decisions later.

Mortgage Lenders

A good mortgage lender does more than just lend you money to buy your Murrieta home. A good lender provides financial guidance and offers suggestions to help you make the most appropriate decisions for your individual circumstances.

For example, early in your home buying endeavor, you will want to contact a lender to obtain prequalification or preferably preapproval for a mortgage loan. Lender prequalification allows you to see how much the lender may let you borrow. However, preapproval is a statement from the lender stating how much the bank will let you borrow and what your borrowing limit is based on you financial situation. Being preapproved is better than being prequalified, if you are seriously considering buying a home.

The preapproval step may be your first encounter with a lender, so it is important to shop for lenders early in the home buying process.

Finding a Lender

You can finance your Murrieta real estate with a loan from a bank, a savings and loan, a credit union, a private mortgage company or various state government lenders. Shopping for a loan is like shopping for any other important purchase: you can save money if you take the time to look for the best prices. Different lenders offer different interest rates and loan fees, which can make a big difference in how much home you can afford. Talk with several lenders before you choose one.

Look for a lender with financial stability and a reputation for customer service. Be sure to select a company that makes you feel comfortable and that is ready to offer helpful advice. A lender that has the authority to approve and process your loan locally is preferable, since it will be easier for you to monitor the status of your application and ask questions. In addition, it is beneficial if the lender knows Murrieta home values and conditions in the local market.

Ask family, friends and co-workers who have bought a home recently if they liked their lender. Murrieta Real estate agents are also good resources because they work with lenders on a regular basis. They are especially discriminating because their livelihoods depend on reputable lenders. You also can look in the local newspaper's real estate section; most newspapers list interest rates being offered by local lenders.

Once you have compiled a list of potential lenders, you are ready to compare them. First, devise a checklist for each institution. Include the company's name, contact information, type of mortgage, minimum down payment required, interest rates and points, closing costs and loan processing time.

You can speak with companies either by phone or in person. However, be certain to talk with every lender on the list on the same day, since interest rates can fluctuate daily. Although your primary purpose in talking with lenders is to compare them, you also are trying to find a lender with whom you feel comfortable working with and trust.

In addition to doing your own research, ask your Murrieta real estate agent if he or she has access to a database of lender and mortgage options. Even though your agent may be affiliated with a particular lending institution, he or she also may be able to suggest a variety of different lender options to you.

Good Faith Estimate

Some borrowers use a good faith estimate to compare lenders. A good faith estimate lists all fees paid before closing, all closing costs and any escrow costs you will encounter when purchasing a home. By law, the lender must supply it within 3 days of your application so that you can make accurate judgments when shopping for a loan. It is a good idea to ask for good faith estimates from at least three lenders for comparison purposes.

Researching Special Home Buying Programs

There are many home buying programs available, some of which you may qualify for depending on your situation. The Department of Housing and Urban Development (HUD) offers some special home buying programs, and many local governments offer home buying programs to help low-income buyers. Visit www.hud.gov and contact your local, county or state offices of housing and community development for more information. If you cannot find what you are looking for, get in touch with the office of your mayor or county commissioner.

First-Time Buyer Programs

If you are a first-time buyer, you may be eligible for special programs that will help you buy your first Murrieta home. A neighborhood bank in Chicago, for example, has a program called HOME–Home Ownership Made Easy–that reaches out to first-time buyers in the area. “We think purchasing a home has always been an American dream, but lately it seems more like a pipe dream,” says Laurene Rose Huffman, commercial real estate officer of Devon Bank. “We encourage first-time buyers by offering a plan that finances 97 percent of the purchase price or the appraised price, whichever is lower, with no points. That means the buyer has to save for only a 3 percent down payment. Plus, we try to make it fast and affordable.”

This program applies to all residential property, including single family homes, condominiums, townhouses and two- to four-unit buildings; it is available in federally designated low- to moderate-income census tracts within the bank's service area. Huffman points out, however, that there is one mandatory stipulation for the applicants: “They must attend a class to learn what it means to buy and own a home. It is a Saturday class, lasting a few hours, and they learn about the responsibilities–including financial–of owning a home.”

The Murrieta community also may offer opportunities for first-time buyers. For example, many urban communities that are encouraging housing development require a set-aside policy that obligates developers to sell a certain percentage of each new development below market rate in order to give first-time buyers an opportunity to own a home. These communities deem it essential that there be moderately priced homes so that the neighborhoods do not force out middle- and lower-income families. Contact your local ward or district representative to ask how to apply for these discounted properties.

When you begin your search for mortgage lenders, Murrieta real estate agents or attorneys, ask your real estate agent about special programs for first-time buyers. They have more information than you do and are eager to help you buy your first home.

The Unscoreables

Some first-time buyers face a tough obstacle because they are what lenders call unscoreables; they lack a credit history because they do not use enough credit to develop a credit file. Many are young adults, minorities, immigrants or people who live by a cash-and-carry system and avoid conventional banking. Nevertheless, they earn a good income, pay their bills on time and would be considered good risks under the traditional credit system.

Because the U.S. Congress estimates that 35 to 50 million people in the United States may not have a full credit reporting history, a House of Representatives Financial Services subcommittee has looked into nontraditional scoring and evaluation systems that would enable first-time buyers to obtain loans without paying higher fees and interest rates. Massachusetts, for example, has begun to use a nontraditional credit scoring system called Anthem that analyzes utility bill payment data as a means of evaluating creditworthiness. Fair Isaac Corporation, the developer of the FICO score widely used to rate consumer credit as mentioned in Chapter 2, also is marketing a nontraditional expansion score. This system accesses private databases for information on payday loans, rental history and other financial transactions.

Another nontraditional scoring system is PRBC, a private national credit bureau; it uses a bill payment scorecard to rate consumers' performance based on rent, child support, student loan and utilities payments.

All of these systems are available to mortgage lenders who want to offer home loans to creditworthy consumers whose low scores are the result of their invisibility to national credit bureaus.

If you need any information on Murrieta Real Estate or Property please check our Murrieta Homes section on this website or contact us at any time.