Mortgage Referrals
Definition of "Mortgage Referrals"
Advice on where to go to get a mortgage. A borrower can always select a loan provider by throwing a dart at the Yellow Pages. A referral is of value if it raises the probability of a good outcome above that from throwing the dart. The four major sources of referrals are real estate sales agents, other borrowers, Internet referral sites, and builders. Real Estate Sales Agents: Home purchasers accept more referrals from real estate sales agents than from all other sources combined. Sales agent referrals generally are to individual loan officers or brokers, as opposed to firms. An agent with great confidence in a loan officer will continue to refer clients even when the loan officer switches firms. Sales agents have the same interest as buyers in completing transactions. Hence, they refer clients to loan providers who can generally be depended upon to close on time. This is the agent's major concern, and it is a concern of borrowers as well. Sales agents have no comparable interest in the mortgage price or whether the borrower is placed in the right kind of mortgage. However, the agent doesn't want the price to be so far out of line or the service provided so abysmal that the borrower throws a fit and blames the agent. Other Borrowers: Referrals from other borrowers are usually based on a single transaction. Internet Referral Sites: These Web sites provide price information for a large number of lenders and mortgage brokers, usually listed by state. They also provide quick entree to the Web sites of each loan provider listed. Builder Referrals: Builder referrals are usually to a lender with whom the builder has a financial arrangement. Hence, they are suspect. In some cases, preferred lenders price loans above the market and kick back some of the excess to the builder. Self-Referrals: Responding to self-referrals (solicitations) usually is a bad idea. Not all lenders who solicit are predators, but all predators solicit.
Popular Mortgage Terms
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The amount the borrower promises to repay, as set forth in the loan contract. The loan amount may exceed the original amount requested by the borrower if he or she elects to include ...
A lender who delivers loans to another (usually larger) lender against prior price commitments the larger lender has made to the correspondent. Mortgage brokers sometimes evolve into ...
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A payment made after the grace period stipulated in the note, usually 10-15 days. ...
The lender's risk that, between the time a lock commitment is given to the borrower and the time the loan is closed, interest rates will rise and the lender will take a loss on selling ...
Every ARM is tied to an interest rate index. An index has three relevant features:availibility, level, volatility. All the common ARM indexes are readily available from a published source, ...
The specific interest rate series to which the interest rate on an ARM is tied, such as 'Treasury Constant Maturities, One-Year,' or 'Eleventh District Cost of Funds.' ...
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