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Frequently Asked Questions

 
Q What is the difference between a mortgage broker and a banker?
A A banker approves a mortgage according to the bank’s guidelines and funds the loan through the bank’s funds. After the loan has been closed, the bank can (and usually does) sell the loan to one of the large, national servicing lenders who will collect the payments from then on. A mortgage broker, on the other hand, will pick from a pool of national lenders, the best program and the best rate for the client, and the national lender will fund the loan at the closing table and collect the monthly payments.
 
Q What are the advantages of using a mortgage broker rather than a banker?
A A banker must evaluate any client from a risk perspective, and must represent the bank’s interest in the lending transaction. A mortgage broker offers the ONLY lending relationship where the BORROWER has representation throughout the loan process. The mortgage broker works FOR the borrower and is able to advocate for the borrower in all phases of the lending process.

Additionally, a mortgage broker will have a substantial number of lenders in his portfolio from which to choose the best rate, the best program, and the best closing terms for the borrower. If one lender does not offer a program for the borrower, another one will. The strength of numbers and the fact that the lenders in a broker’s portfolio compete for the business, insures that the borrower gets the best rates and terms.


Q Are all mortgage brokers the same?
A Some mortgage brokers choose to concentrate on the conventional loan market where borrower’s have generally good credit. Other brokers concentrate on the sub—prime market where mortgage loans can be made to borrowers who have less than perfect credit, at higher rates than the conventional loans.

Preferred Financial Services has chosen to concentrate their efforts in the conventional mortgage market, assembling 35 lenders to assure the client of obtaining the lowest rates in the market. 

The conventional market has greatly expanded its programs in the past five years to include first time homebuyer programs, borrowed down payment programs, and many other specialty loans that meet the increasingly changing demands of the consumer.

Preferred Financial keeps around 12 sub—prime lenders in their portfolio to provide options to a buyer that has less than perfect credit. However, our main effort is to first qualify a borrower on a low rate, conventional program before looking to the sub—prime market.


Q How do I know if I qualify for a house
A
Fill out our
pre-qualifying form to find out
 
Q How do I know how much house I can afford?
A
Use our
mortgage calculator's to find out
 
Q Where can I get my down payment from? Can it be gifted or borrowed?
A Regular conventional loans require that the borrower put AT LEAST 5% down, and that the down payment come from their own earned and saved funds. The quality control checks during the loan process include obtaining your last 90 days’ bank statements to show that any money coming in to your account came from your own earnings. However, there are several NEW programs that change these rules:

You may use the regular, conventional programs and BORROW your down payment against:

Your 401-K plan

Any real estate

Any fixed asset, including your automobile

OR, you can use the NEW BORROWED FUNDS PROGRAM, put only 3% down, and obtain your down payment from:

A Gift from a near relative

An unsecured loan

Even your credit card!

The BORROWED FUNDS PROGRAM will result in a slightly higher rate and payment. On the average loan of $100,000, your total monthly payment will be around $15 per month higher than the regular conventional program


Q What if I have NO CREDIT at all?
A Fortunately, the conventional first time homebuyer’s program allows you to use ALTERNATIVE CREDIT if you do not have other established credit. To qualify for this loan, you must have:

A 12 month rent history with no 30 day late payments

Three other credit references which are 12 months in length from the following list:

Utility payments (electricity, gas, water, phone)

Automobile insurance payments

Payment's to doctor’s offices or dental offices

Rent to own contracts on furniture, appliances, etc.

Any private credit obtained that did not get reported to the credit bureau (auto financing, local furniture stores, local hardware stores, etc.)

All of your 12 month credit references will have to show NO 30 day late payments for you to qualify.


A Division of Preferred Financial Services, Inc. Serving Mortgage Clients for over a decade.

Preferred Financial Services
311 Pettigru Street
Greenville, SC 29601

(800) 894-8812 toll free
(864) 235-9596 local

(864) 235-9688 fax


Copyright 2003 Advisor Mortgage Network. All rights reserved.