Selecting The Right Financing Institution

Selecting The Right Financing Institution



Selecting The Right Financing Institution
Just like anything in​ life, you get more by knowing more .​
Knowledge is​ power in​ every industry, especially in​ real estate investing .​
Knowing the right people will always give you success .​
Another avenue of​ success is​ by having a​ knowledge of​ the process and selecting the right option for you.
BROKER VS .​
THE BANK
Typically, a​ mortgage broker offers more types of​ financing than traditional banks .​
While the bank can only offer loan programs from their institution, the mortgage broker represents a​ number of​ banks and other lenders, which results in​ more financing options for the borrower .​
Even though brokers have more options to​ meet your needs, we recommend that you start looking for financing at​ the bank first .​
While their options are more limited, if​ they have an​ option that meets your needs you will save money because banks can offer financing with cheaper initializing costs than the broker.
This may sound funny, but you need to​ make sure your loan officer qualifies for your business .​
The fact is​ all loan officers are not created equal .​
You need to​ make sure that your loan officer is​ very experienced and up-to-date on the different types of​ financing programs available .​
Their loan market is​ always innovating and developing new financing options .​
It is​ absolutely essential that your loan officer is​ aware of​ these options .​
Call around and ask lots of​ questions when interviewing potential loan officers, for there are far too many who aren't qualified to​ serve you .​
If one indicates that they are unable to​ provide you the type of​ financing that you’re looking for, simply take your business elsewhere.
MORTGAGES AND TRUST DEEDS
A mortgage is​ a​ voluntary lien on a​ piece of​ real estate .​
In other words, when a​ person borrows money to​ buy a​ property, the borrower gives the lender the right to​ take that property if​ the borrower fails to​ repay the loan .​
The real estate acts as​ collateral for the debt .​
However, the specific rights the mortgagor (borrower) gives the mortgagee (lender) vary from state to​ state.
What most people refer to​ as​ a​ mortgage is​ really a​ trust deed or​ a​ deed of​ trust .​
Sometimes, lenders prefer to​ use a​ trust deed rather than a​ mortgage .​
a​ trust deed conveys naked title or​ bare legal title (title without the right of​ possession) as​ security for the loan to​ a​ third party, called the trustee .​
The trustee holds the bare title on behalf of​ the lender, who is​ known as​ the beneficiary .​
The beneficiary is​ the holder of​ the note .​
The conveyance establishes the actions that the trustee may take if​ the borrower (or trustor) defaults under any of​ the deed of​ trust terms.




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