The Consumer Financial Protection Bureau
has set specific guidelines with regard to pricing, rates, and other factors concerning loans, but it does not change the fact that lenders can choose to operate differently within those guidelines.
Certain lenders may be able to give borrowers better rates, but borrowers have to look deeper in order to determine if a certain provider is the best lender for them.
Here are some of the things borrowers need to consider before choosing to work with a lender:
1. Affiliations with Freddie Mac and Fannie Mae. This consideration is especially important for borrowers with complex income situations (ie freelancers) as these institutions determine the ability of a lender to fund a mortgage.
2. Lender Approval Guidelines. Some lenders may entice borrowers planning to use FHA loans with lower credits scores; others might be willing to have higher debt-to-income ratio than the 43% standard. The guidelines of a lender will depend on the kind of risks it is willing to take on. Bear in mind, however, that lenient lenders are not always the best option because it means they have more borrowers that wouldn't traditionally qualify with traditional lenders and may bear more risk than a standard lender.
3. Investor Overlays. Investor overlays are additional restrictions lenders may require aside from those imposed by Freddie Mac and Fannie Mae. Some lenders would allow borrowers to pay off debts to qualify for a loan, while others wouldn't be as willing.
Simply put, aside from choosing the perfect home, you as a home buyer, also need to consider the length of the loan, interest rates, mortgage lender requirements, and other factors that would help you bring make your dream home purchase come true. If you want to know more about choosing the right mortgage lender for you, you can access the original article from which this post was based here