Benefits of working with CalRiviera Mortgage Brokers
Product Selection
Quite few individuals when purchasing property look to direct lenders such as banks and mortgage bankers with retail establishments as a source for funding. Usually, banks or mortgage banks try to be competitive with one or several products, and encourage their sales agents to sell these specific bank products to the consumer. Many times banks don’t try very hard to be competitive in rate, but will instead try to fill a niche, such as quick approvals or flexible underwriting (easier approval) of loans. Going directly to the bank or source was probably the way that your parents obtained their property loan, but the trend is clearly away from such direct establishments towards the brokerage or “multi-lender platform” as brokers are now being called.
Brokers or multi-lender platforms like those that CalRiviera has long term relationships with, represent a number of lenders and offer these lender’s products through a wholesale arrangement. So we can offer wholesale rates, as opposed to retail rates. The lender will then compensate the broker when they deliver a loan to them and this compensation is invisible to the borrower, meaning it may not come out of the buyer’s pocket. By offering wholesale rates, a broker can in fact be more competitive than the retail side of the same bank. This is happening more and more as brokers are moving their services to the Internet and reducing their costs of distributing loans to the consumer.
Multi-lender brokers, such as CalRiviera lenders can be the most competitive source for mortgage loans available.
Brokers versus Bankers – Service
Direct lenders are captive to their own products. That is, they will not provide unbiased advice nor selection, since by doing so they will possibly risk losing your loan to the company whose product truly provides you the most value.
Brokers on the other hand can sell a variety of products, from multiple sources, and can be objective in their recommendations. The compensation provided from one lender is equal to that from another lender, therefore the outcome of the recommendation doesn’t matter. What does matter is giving you the best loan for your needs.
If you walk into your local bank, S&L, or retail mortgage bank they’ll usually take your application there, perhaps underwrite your loan there, and lend their own money. If your loan is declined for whatever reason, you will need to begin the process again with another source. With a multi lender source, you have another chance if one lender doesn’t approve your loan.
Bankers make their salary whether you take the loan or not. Brokers only get paid when the loan closes. Who has the most motivation to get you a loan?
For simplicity’s sake, we’ll describe the overall process that is common to all loan applications regardless of the source of funds.
The Application Process
Whether you walk into a bank, you apply for your loan on the Internet, or a mortgage officer meets you in your home, all lenders require an actual application. The form is standardized and known as the “1003” which is the Fannie Mae designation for this form.
The lender will want to verify certain information about the borrower(s) and will require additional information on the property. Borrower information will include verification of income and employment, assets, and credit history of the applicants. You, the applicant, as part of your application process, will provide some of this information. For example, you may be requested to provide copies of W-2 forms for 2 years, pay stubs, and bank statements for asset verification. Other information, such as your credit history, will be obtained directly from the credit bureaus even if you have a current credit report on hand. The lenders will always verify this information independently. There are a variety of loans and a variety of documents necessary for each type of loan, CalRiviers brokers will review your situation and tailor a loan that both suits your budget as well as provide you the best options for your future goals in real estate wealth building. Please review our “Documents Necessary for a Loan” page to get more details about the documents that you may need to get loan approval.
For the property itself, the lender will order an appraisal and a legal description of the property, such as a title report. Certain lenders will work with certain appraisal companies, so if you have an old appraisal the new lender may not necessarily accept it. Even if the loan is to be made with a relatively large down payment, the lender still wants the property appraised. In the case of a purchase, other inspections may also be done, but are separate from the appraisal for the loan.
The Approval Process
During the “processing” and/or “underwriting” period, your credit, assets, income and other determinants are checked and compiled. At the end, your loan is either approved with conditions or approved without conditions or declined. Sometimes a loan is labeled suspended which while sounding harsh, is simply another way of saying that the lender requires more information to decide. Don’t be alarmed if your loan is suspended, this is not necessarily a step towards being declined. Usually you can submit additional documents and turn a suspension into an approval.
Conditions are further documentation or checks that the lender needs to finalize your loan before funds can be dispersed. Many borrowers become frustrated by conditions that surface at the end of a loan transaction and can’t understand why they are being raised so late. This is because the loan may go through several review processes prior to actual funding, and the final conditions are added on sometimes as late as after the loan documents have been signed. CalRiviera lenders will work with you to satisfy the lender, remember, the process is not perfect and the lender is simply trying to meet conditions imposed by other sources on them. Since most loans these days are sold and serviced by other parties, the lender must verify that the loan will be salable upon close. Whether or not your original mortgage lender services you or a new party shouldn’t matter, your payment will simply be made to the new institution. No other terms of your loan can be changed after you have signed your final loan documents.
When all conditions are met, your loan documents are drawn up and forwarded to the place of settlement or closing.
CalRiviera provide these tips to ensure a smooth loan approval. Do not make any adverse changes to your financial “picture” during this delicate time between approval and when funds are dispersed. Believing the “approval” is the final stage or that the lender won’t find out about the change in debt or income or other factors can lead to real headaches. Innocent mistakes range from applying for a new department store credit card to purchasing a refrigerator for the new house, to buying two new Mercedes Benz sedans, to quitting a job to go full time into a new business. These changes will at least force an explanation to be given and at worst may cause your loan not to fund and the approval to be withdrawn. Often a lender may obtain another credit report and may call your employer one last time before funding the loan.
Simultaneous to funds being dispersed, an instrument is recorded at the county recorders office to give the lender security to your property.
The Lock Process
Sometime before your loan documents are drawn, you will “lock in” a rate for your loan with the mortgage source. The purpose of the lock is to allow you a loan at the “locked-in” rate if the loan closes before the lock period expires, even if rates are higher at the time of funding. This could be offered at the application, upon approval, or anywhere in between. Most multi-lender sources give you the choice of when to lock. Typically, the shorter the time period between your lock and the actual closing, the cheaper the interest rate or points.
To summarize, there are many ways to approach your home financing process beginning with the source that you choose to borrow from. The advantages of working with a broker with relationships with CalRiviera are substantial and our aim is to minimize the likelihood of frustration during the loan transaction. CalRiviera has established itself as a company with integrity that cares for the borrower throughout the entire loan application and property acquiring process.