One of the most important processes of purchasing a home is getting a real estate loan. Real estate loans are tricky. It is a little complicated especially if you encountering the terms for the first time. The need and circumstances vary for each buyer. There are many options available in the market and it is vital for a buyer to be knowledgeable to every option and know where to get them.
Here are some of the popular and most advised options.
- Mortgage Bank – It is a bank entity licensed by the state to operate directly to the needs of the consumers on loan mortgages. The bank uses its own capital and resources to finance the loans applied by the home buyer. These loans are later sold on secondary market to other investors such as Fannie Mae and Freddie Mac. The interest rates are determined by the bank policy and fixed. It is usually non-negotiable.
- Commercial Bank – It is a typical bank which offers extended services on loan mortgages. Lending for real estate investment is not their primary business, but can give you reasonable option for a loan. Naturally, these are only available for commercial bank clients. A home buyer usually maintains a saving or a checking account to the bank where the loan is from. Incentives and discounts are the best add-ons this option has.
- Mortgage Broker – This is also known as the “middle man”. It is the one that connects the borrower to the lender. This is the most popular choice of home buyers. It is very easy and uncomplicated. Technically, you hire them. The mortgage brokers usually works as front liners and negotiate in behalf of the buyers. They look for the options with the lowest interest rates and the most flexible loan out there in the market.
- Savings and Loan Association (S&L) – This option specializes on thrift. It is the process wherein saving deposits are accepted from buyers and loans are given thereafter. The purpose of the association is merely for home purchase, construction and improvement. It is less complicated than dealing with banks. They have more flexible options for the buyer to choose from. It is regulated by the Department of U.S. Treasury through the office of Thrift Supervision.
On your search for the best loan in the market, you must consider carefully the options. You need to study which loan rightly fits on your situation. You may ask advice from your real estate representative. Kirkland WA Homes For Sale is here to guide you every step of the way.