When REALTORS® Recommend a Lender
If your REALTOR® makes a suggestion for a lender, be sure to talk to that lender. There are several reasons they make recommendations.
One reason Realtors make suggestions is because they want to recommend someone reliable. Reliability is important to you, so that you don't end up with a horror story to tell. Reliability is also important to the seller, the agents, and everyone involved in your transaction because if the deal doesn't close, everyone walks away with nothing.
When agents recommend lenders, they often develop a certain amount of "clout" in dealing with those lenders. This can help in a situation where you need to cut through "red tape" and get something done quickly.
When buying a new home, dealing with a recommended lender is often very important. This is because there are a lot of intricacies involved in home buying and financing. If you "shop" around to find your own lender, you may find someone who does not deliver what they promise.
Over the last ten years, real estate companies have built up their own mortgage and title companies. "Bundled services" like this make sense because they add convenience to the transaction. There is a sense of comfort to know that you can walk in a building and talk to your agent, loan officer, insurance provider, and settlement agent all in one place. The Tim Sova Team as a part of RE/MAX Platinum offers convenience and ?one stop shopping? which is beneficial to all involved. These types of relationships lead to smooth transactions and happy clients!
Please use our website to search for listings and learn about the area. Check out our other Blogs for information on our services for Seller's, our services for Buyer's and our Marketing Plan.
Mortgages
The modern mortgage market offers a variety of mortgage loans catering to the needs of Michigan homebuyers. The titles and details of these plans can become confusing, especially as new types are introduced continuously. You can make sense of these loan types, however, if you understand the basic principles that govern all mortgage loans. Again, you can look to The Tim Sova Team for professional real estate assistance. Contact us to discuss your options and get a reputable referral.
Basic Principles of all Mortgage Loans
- The home is used as security to back up the loan. A lender can force sale of the home if the borrower defaults by failing to make scheduled payments.
- The larger the loan compared to the value of the home, the more risky for the lender and, often, the more expensive the loan will be.
- Interest earned by the lender always is equal to the periodic interest rate times the outstanding principle balance of the loan. The periodic interest rate is the annual interest rate divided by the number of payments in the year (usually one per month).
- The required payment usually is a bit larger than the interest due so that some of the loan principal is repaid with each payment. This process is called Amortization and is why most mortgage loans can be retired when all the monthly payments have been made.
All mortgage loans have one of the following features:
- Fixed payment and fixed interest rate - fixed rate mortgages
- Fixed rate but variable payment - graduated payment mortgages
- Variable rate and variable payment - adjustable rate mortgages
As you learn more about the types of financing available, you will notice that some loans appear to have more favorable terms. That may indicate that those loans are, indeed, bargains (and it does pay to shop around), but usually it means that those loans could have some feature that is less appealing to borrowers. For example, shorter-term loans often have slightly lower interest rates compared to longer-term loans. However, the monthly payment for the same amount of principal may be higher because of the shorter term. Variable rate loans usually have much lower interest rates to compensate for the risk the borrower accepts that interest rates will rise in the future.
