BUYING A FOR SALE BY OWNER HOME  
   
Written by Susan Wilcox

[ disclaimer ]

A MORTGAGE BROKER
If you have perfect credit, a 20 percent down payment, and enough additional savings for closing costs, you don't need a broker. You can go directly to your favorite bank, credit union or savings & loan, and they'll roll out the red carpet for you.

But if your credit has a few dings or the down payment is a problem, your best bet is a mortgage broker. A good broker stays on top of the various loan programs available, will know which one is right for you, and will help you navigate the process of actually getting that loan.

The keywords here are "good broker." Like used car salesmen, some brokers do not live up to their promises. On the other hand, a competent and capable broker may be your best means of getting the home you want.

How do you find a "good broker?"

Referrals! Ask family and friends whom they used to get their loans. Then ask them how satisfied they were. Did their broker…
• Get them a loan they are happy with?
• Return their calls quickly?
• Respond to their needs and concerns?
• Give clear and complete information?
• Close on time?
• Handle any misunderstandings?
• Provide an accurate estimate of closing costs?

Any "no" answer is a signal to keep looking around.

Once you find the right broker, you have a partner who can work magic! The first thing your broker will do is to pull a credit report that will show your credit score.

What's a credit score? Simply the key to getting a loan – not just a mortgage loan, but a car loan, credit cards, or an installment loan for that new refrigerator.

A credit score is a number between 350 and 850 that predicts how likely you are to pay or default on your loan. It's calculated by the credit bureaus using a model based on the credit behavior of millions of other individuals. Your credit behavior is "compared" to theirs and you're given a score that indicates your creditworthiness.


If your credit score and income-debt ratio look good, your mortgage broker will "preapprove" you for a mortgage loan. If your credit score is on the low side, the broker can tell you how to legally raise that score by correcting inaccuracies; then preapprove you once that's done.

The preapproval letter your broker will give you not only tells you exactly what kind of loan you can get; it will become important later once you find a home and want to make an offer on it.




    
     

 


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