Yes and No.  Sometimes the reality is not as rosy as the perceived reality. 

There are three basic mortgage entities you can work with; a Broker, Correspondent Lender, or a Bank. 

• A Broker maintains multiple relationships with lenders that offer their loan programs, and the Broker relies on the chosen lender’s underwriting and closing departments to approve and close their loans.
• A Bank usually lends its own money and has in-house Underwriters and Closers – but they often have more strict guidelines and only offer the loan programs created by the bank.
• A Correspondent Lender maintains multiple lending outlets like a broker, but also employs in-house Underwriters and Closing operations. 

So, which is better?.......... Hard to say. 

Many mortgage financing sources will boast that they can just step down the hall to their in-house Underwriter and get an expedient (presumably affirmative) loan approval.  This tends to give one the assumption that every underwriter who works within the same company is willing to be a little more flexible.  Whereas that can be true in some companies, in other organizations an in-house underwriter may need to be more cautious to avoid any implication of impropriety.  Some lenders even have a policy that underwriters reviewing branch office files must be more strictly evaluated, and in other cases it is company policy for the loan officer and underwriter to avoid directly discussing a loan file. 

Brokers will tell you about their access to large national wholesale lender’s programs that rival the singular offerings of a bank.  But brokers are going to be at the mercy of the service supplied by the lender’s Underwriter and Closing departments, so they have to be careful which lender they choose for your loan.  The experience and relationship between the broker and the lender is critical to your loan experience. 

Regardless of whether you use a Broker, Correspondent Lender, or a Bank, your best decision will rest in the person you choose more often than the type of company you use.  For this reason, you may want to consider the wisdom of using someone you trust – someone that has a great reputation combined with a depth of knowledge and experience of the industry.  If you are working with that kind of person, their organizational setup becomes a distant second in your decision making process.  Honesty and integrity are the two best assets to have on your side in any transaction. 

At Churchill Mortgage our Home Loan Specialist have the heart of teacher and are willing to spend the time it takes to help you understand the best options for your personal situation.  If you are considering purchasing a home or refinancing your current mortgage, we would be happy to assist.  Call us at 1-888-562-6200 or Request A Call Back on our website www.churchillmortgage.com and we will contact you at a time that is convenient for you.

We constantly find that there is a great deal of misunderstanding related to the idea that every lender has a set of guidelines which have basically been cast in stone.  An example of this is “...They say you can't get a mortgage if you don’t have a credit score.”

There are many different types of generic guidelines which form the basis for mortgage approvals.  In effect, these are “rules” which lenders use as their baseline for evaluating loans.  The most popularly known guidelines are - FHA, VA, FNMA (commonly referred to as "Fannie Mae"), and FHLMC (commonly referred to as Freddie Mac").  These guidelines and procedures change frequently and many lenders will deviate from these guidelines in order to obtain a special competitive advantage.  As a consumer, it is critical that you choose a lender who has a good understanding of the basic guidelines.  In addition, you should seek a company with access to multiple lenders who have the ability to deviate from standard financing guidelines.  You can make a big mistake by going to a lender who only offers one method of financing your home, such as a local bank with only one set of guidelines.

At Churchill Mortgage, we assess hundreds of loan programs from the top banks and mortgage servicers from across the country.  This allows us to evaluate multiple lending sources to find the loan that best fits your needs.  Contact one of our Home Loan Specialist at 1-888-562-6200 if you are interested in purchasing or refinancing your mortgage.  You can also visit our website www.churchillmortgage.com to Request A Call Back and we will contact you at a time that is convenient for you.

The Federal Housing Administration (FHA) established their “First Time Homebuyer” program many years ago, and their branding of that program has endured even to today.  But in the 1990’s, Conventional FNMA and Freddie Mac guidelines and lenders created more aggressive lending programs that eclipsed FHA’s program by introducing loans that required no down payment at all.  After the collapse of the mortgage market and government takeover of FNMA and Freddie Mac, all lending guidelines became much tighter and these Conventional no down payment loans have all but vanished.  In 2009, FHA made a huge comeback as the loan program of choice due to the relaxed underwriting guidelines and low 3.5% down payment. 

Below is a list of both advantages and disadvantages to using an FHA loan to help guide you in deciding if an FHA is right for you.

Disadvantages to an FHA loan:

1. Mortgage insurance is required in most cases, both monthly and an upfront fee of 2.25%.
2. The process can take a little bit longer.
3. Interest rates for A+ credit borrowers may be higher on FHA loans vs. Conventional rates.
4. FHA monthly mortgage insurance premium (MIP) must stay on the loan for a minimum of 5 years.  Conventional mortgage insurance (PMI) can be dropped once the property’s appraised value vs. balance owed shows an equity position of 20% or more.

Advantages to an FHA loan:

1. FHA only requires 3.5% down payment vs. Conventional 5%.
2. The lower monthly mortgage insurance premium often allows for a lower monthly payment.
3. FHA underwriting guidelines are more liberal on your debt to income ratio (you can possibly qualify for a slightly higher loan amount).
4. FHA underwriting does not use credit scores to qualify, so you may get an A+ rate when conforming lenders turn you down.  However, many individual lenders do set their own minimum credit scores over and above FHA’s guidelines.
5. Conventional lenders use Risk-Based Pricing that penalizes a borrower for having a lower credit score by requiring an increased rate or payment of additional points.  As of Nov 2009, FHA does not use credit scores for determining eligibility or pricing, but it has been proposed.  If your credit score is not A+, it is in your best interests to compare an FHA option side-by-side to a Conventional option to see which one is the best deal for your situation.  We highly suggest you look past the monthly payment and take note of your Remaining Balance Owed after 5 years.  If your monthly payments are about the same but one option has a lower balance owed after a term of 5 years or more, you are saving money with that option that has the lower balance owed. 

Our best guidance is to compare both options side-by-side and look at the ending balance numbers to make the best decision for your personal needs.  Then work with someone you trust that will help you understand the details so you can make the best decision.  Churchill Mortgage would be happy to assist you in this process. Contact one of our Home Loan Specialist at 1-888-562-6200 or Request A Call Back on our website www.churchillmortgage.com and we will contact you at a time that is convenient for you.

Late Wednesday night, the United States Senate approved to extend the closing deadline by three months to home buyers who are trying to get the tax credit.  To obtain the credit, buyers must have entered into a binding contract no later than April 30th, 2010 and close by September 30th, 2010.  The previous closing deadline was June 30th,2010, but some buyers didn't have enough time to get all the papers signed by all parties within that time frame.  Congress passed the new legislations in hopes that it will be enough time for all the transactions to go through.  The home buyer measure was passed with a unanimous voice vote and sent to President Obama, who is expected to sign it Friday morning.

It is important to note, this legislation only pertains to homebuyers who had an executed sales contract by April 30th, 2010.  It does not extend that deadline.  It only extends the expiration date for those that had a fully executed contract by April 30th, 2010 and gives them until September 30th, 2010 to close their loan.

Additionally, the Senate restored the National Flood Insurance Program Extension plan until September 30, 2010. This will allow transactions to move forward. It is retroactive to June 1, 2010 when it expired.

On Monday of this week, mortgage rates fell to the lowest level on record, giving consumers added incentive to lock in low payments for home purchases and refinance loans.  The average rate for 30-year fixed loans sank to 4.69%, from 4.75% last week, mortgage company Freddie Mac reported Thursday.  That's the lowest point since Freddie Mac began tracking rates in April 1971.  Rates for 15-year and five-year mortgages also hit record lows. 

We all know refinancing can allow us to lower our monthly payment, but are there other reasons and strategies to consider when you refinance.

1. Lower term, same payment: If you want to pay off your home sooner or build equity faster, consider a loan term that will lower your rate and the term (years) of your loan, but leave the payment the same.  This will save you thousands of dollars in many cases, and accomplish your goal of being debt free much faster. 

2. Get Rid Of Mortgage Insurance:  If you had to pay mortgage insurance when you took out your loan or you have an FHA loan with mortgage insurance, you may be able to drop that monthly payment by refinancing.  Your opportunities here are going to be heavily dependent on your appraisal, so try to get some good info from a Realtor regarding value before paying for an appraisal.

3. Credit Situation May Have Improved:  Did you have some credit issues when you took out your first mortgage?  If things have improved or enough time has gone by for those items to be minimized, you may qualify for a better rate or terms for your loan. 

4. Combine 1^st and 2^nd Into One Payment:  We have many calls from people that currently have two mortgage payments that want to combine them into one payment.  That makes it easier, but there is some caution when refinancing for this reason.  Home values in most areas have either flattened or fallen, potentially making your home worth less in the market.  You may have taken out two mortgages to avoid paying mortgage insurance, and trying to combine into one loan without mortgage insurance will be dependent on the home appraising for an amount that shows 20% or more equity position.  That can be risky, so get some good info from a Realtor regarding value before paying for an appraisal.

5. Convert Interest Only, A.R.M.s, or Balloon Loans To Fixed:  If you have one of these types of loans, it may be very beneficial for you to investigate your options to refinance to a fixed rate mortgage that allows you to start building equity and avoid increases to your monthly payment in the future.

The key element in your research is finding a trusted loan professional to help you create a strategy that fits your present and future needs.  Give us a call at 1-888-562-6200.