A closer look at the Mortgage Market
    
The Mortgage Market is much bigger than most consumers are aware. For most Americans, their home is their most prized possession and their biggest investment. More and more consumers are buying homes instead of renting since they are convinced that property values are constantly increasing causing their investment in their home to appreciate over time while they enjoy the benefits of home ownership and the comfort of living in their own home.
    
To accommodate America's love for owning their own home, financial institutions offer to loan consumers the funds to buy new or existinghomes since they are comfortable that the home will hold it's value and the institution can sell it if the borrower does not make payments on the loan. As long as real estate prices go up, everyone is happy. But when home prices start to decline, the institutions can wind up with a lot of homes on their hands that they need to sell to get their money back from. This decline in real estate in the past has developed the institutions keen sense of who to loan money to and at what interest rate.
    
    
Lets take a quick look at the major"Players" in today's Mortgage Market
     
A. The Consumer Borrower
Just about anyone, regardless of their credit history, can borrow money to purchase a home or refinance an existing residence. Every borrower is different,with different needs, different credit worthiness and different circumstances. The "variable" that allows almost anyone to borrow is the "interest rate" they are charged to borrow the funds.
    
B. Mortgage Lenders
Include Banks, Savings & Loans,Credit Unions, Insurance Companies, Corporations, Mortgage Companies,The Government and it's Agencies, and Individual Investors. In fact, anyone can become a lender as long as they have enough networth and can file the proper paperwork and become approved. Lenders are the ones who quote the interest rate on the particular Mortgage Program the borrower wants and then arranges the proceeds of the loan go to the seller and all other parties involved. The lender may then do one of two things : they can hold on to your mortgage and collect your monthly payment until the loan is paid off...or,they can sell your mortgage to an investor or into the mortgage market. If they sell it, they will usually continue to collect your monthly payments and pass them on to the new owner of the mortgage so you never know that it has been sold. For this service, they will earn a small servicing fee from the new investor. This allows the original lender to continue to lend out the funds to new borrowers.
    
C. Loan Officers
Usually are employees of the Mortgage Lender. They help the consumer with the borrowing process and deciding which loan is the best to fit the borrower's particular needs. However, they are usually restricted to the Mortgage Programs offered by their employer.

D. Mortgage Brokers
Are usually independent Licensed Brokers that have established relationships with several Mortgage Lenders.They can offer the consumer a broader range of Mortgage Programs since they can pick from a variety of Lenders. They also can spend more time tailor fitting a loan to the borrower's situation sincethey are not a "9 to 5" office employee, but an independent professional who knows the business and lenders in the business.
    
With all the different "players" in the Mortgage Market, the Government has established a vast array of laws and guidelines to help protect the consumer from any deceiving practices.One such law is the "Annual Percentage Rate" that the lender must inform you of when he offers you an interest rate quote on a mortgage program. The "Annual Percentage Rate", or"APR", has to include all the fees and discounts that the lender is including in the loan. As an example, if the lender quotes you an interest rate of 4.25% on a 30 year fixed rate mortgage,he must also tell you that the "APR" is 4.51% as example if there are fees and discounts added to the mortgage. Those fees or discounts actually cost you the 4.51% on an annual basis when added to the interest cost of the loan itself. Another law to protect the borrower is the "Good Faith Estimate" HUD Statement,which the lender must provide to the borrower BEFORE the loan closing. This Statement will list all the closing cost and other costs the borrower will be expected to pay at the closing of the loan. It is usually a "Good Faith" estimate, but must be very close to the actual costs involved.

With the advent of the Internet, consumers now have a much easier way of obtaining ideas of the different mortgage programs that are available and what the interest rates on each program currently are. Almost every large mortgage company has a web site as do many banks and savings and loans. Filling out some details about you and your mortgage needs on an applicationcan usually produce interest rate quotes from several lenders via the internet, e-mail or a phone call. Because there are so many different mortgage lenders with many different criteria, it only makes sense for the consumer to search the web for many different lenders or to seek the help of a "Mortgage Broker"who can do a lot of the leg work for you.

A mortgage Broker can tell you also if you qualify for one of several Government Mortgage Programs or Agency Programs. There are also programs for low income borrowers and other special need situations that the lenders may not tell you about, but a Mortgage Broker will know about. An informed consumer borrower will get a much better mortgage program and interest rate than one who does not do their homework. And with this site and the other mortgage sites, help is available online if you just take the time to seek it out.
  
    
    
    
For complete details and current interest rates e-mail :
Info@Mortgage2USA.com 
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