Effective Role Of Mortgage Broker Bond

Mortgage brokers play an essential and important role all over the economy. Nowadays, mortgage broker bond becomes the important bond and it is required for the people who are engaged in the business of mortgage broker business, mortgage lending business. Mortgage brokers or lenders or dealers are required to obtain license and permit from the licensing department. This mortgage broker license is required for the mortgage brokers who are engaged in the business of mortgage in state. To obtain this mortgage broker license, the applicant is required to obtain mortgage broker bond from the appropriate state. Mortgage broker bonds are issued as per the statutes and ordinance of the state and federal jurisdiction.

Mortgage broker bond ensures proper performance of mortgage business without any default act of the mortgage broker or lender. Mortgage broker bonds are issued all over the different parts of the states and most of the industries analyzed the need of mortgage broker bond in the state. Mortgage broker bond protects the obligee against the non performance of contract by the principal in the state and enforce the mortgage broker to give a performance. Today, trend has been changed and most of the people enforce to issue mortgage broker bonds as per the state ordinance. Mortgage broker bond also forms part of different kinds of surety bonds and this mortgage broker bond are issued in separate forms and different bond amounts.

Mortgage broker bonds play an effective role in the economy and all most every part of the world mortgage broker bonds are required. Mortgage broker bond are issued as per the rules and regulations of the state statutes and ordinance. All mortgage brokers of the state are required to obtain a mortgage broker bond from the appropriate surety bonding company. Nowadays, more number of surety Bonding Company comes forward to issue mortgage broker surety bond to the people as per their requirement and needs. This mortgage broker bonds are issued to the people as per their requirement and different premiums.

When people recognize the purpose and use of surety bond, then it can be said that nonperformance and default act of the contract will be avoided and prevented. When the mortgage broker or lender or dealer fails to perform the contract, then the obligee can sue the mortgage broker or lender or dealer for non-performance of contract. The obligee has every right to sue both the mortgage broker and surety for the non-performance of contract. When all requirements are satisfied and legally compiled by the applicant, mortgage broker bond will be issued to the applicant. Mortgage broker bond and mortgage broker license are the most important requirements needed for the mortgage broker or lender or dealer.

Why Using a Mortgage Broker Can Save You These 7 Loan Application Mistakes

1. There are too many credit enquiry notations on your credit file.

Mortgage Lenders do not like doing work for nothing, and I guess it is only natural that borrowers want to ensure they get the best deal. The problem hits the fan when you rack up too many hits on your credit file, and alarm bells start ringing at all lenders, as they all have access to the same credit files. The result can be you get your application declined from all lenders!

Loan Application Tip: Don’t sign [or give verbal approval] to any lender to access your credit file, till you have decided which lender you will be applying with. Get your Mortgage Broker to apply for the best loan you are eligible for after he or she has properly qualified your needs.

2. Your home loan submission is poorly written.

Any innocent or deliberate errors or omissions in answering questions about your credit history and your partners, can be viewed as suspicious or even fraudulent by the lender or mortgage Insurer. Most people don’t know that what you don’t say [omissions], can at law be taken as a misrepresentation of the facts.

Loan Application Tip: Have your Mortgage Broker get your credit report for all parties to the loan before you submit your loan application. Ensure that your Mortgage Broker writes a synopsis to cover your mortgage application, explaining why the loan should proceed and ironing out any wrinkles there may be.

This extra work on the part of your Mortgage Broker can get your loan application over the line, especially where your broker is a trusted party in the home loan process with a lenders back office team.

3. Your proposed home is appraised as less than the purchase price agreed.

When a property value is appraised by the lender’s valuers as less than the purchase price, you have a problem.

Because banks only lend on Loan to Value Ratios. For instance let us say that your $400,000 home is valued at $360,000. 10% deposit is 40,000 and costs are say $8,000. Yes, you have the $48,000 required. But the bank will only lend on 90% of $360,000 [the appraised value, or $330,000. With your $40,000 deposit that makes a total of $370,000 and you are $30,000 short.

Loan Application Tip: A Mortgage Broker will give you the options you need to try to resolve this, including re-negotiating the price down with the sellers agent, getting the lenders to have the valuers re-appraise, or asking the lender to appoint a new valuer [at your cost].

Another solution may be to get a new lender who has a valuer that may be more appreciative of the value of your proposed home. Finally, you may have to find another home that values better.

4. Your Lender says you have insufficient savings, deposit or income.

Down payments and income requirements and payment capacity can vary between lenders.Also, the deposit is not all the money you need to complete a home settlement. You will have conveyance lawyer costs, property tax and other costs that might include mortgage insurance, property and mortgage stamp duty.

Loan Application Tip: Ensure that you have the funds for your costs, in addition to your down payment. Your mortgage Broker can help you with all of this.

AND/OR, find a mortgage lender who has less home loan deposit requirements, or who pays your mortgage insurance for you, OR find a lender that requires no mortgage insurance as they carry that themselves.

5. You have changed jobs, or employment status recently.

Many residential mortgage lenders, [or their mortgage insurers] view changing jobs in high unemployment times as a sign of instability that may lead to you defaulting on the loan.

The other problem is that if you are on probation for 3 to 6 months, your income cannot be assessed as proof of income till the probation period has lapsed.

Loan Application Tip: Your Mortgage Broker may find a lender who calculates your repayment ability in a more favourable way, or a lender that will take a letter from your employer that your job is secure beyond probation, and then get that letter from your employer.

If that is not possible your Mortgage Broker will find a sub-prime or low doc lender to approve your loan for you.

6. You have no savings history or irregular savings patterns.

Banks like to see stable incomes and regular savings for at least 6 months prior to the loan application. This shows you can plan for buying a home. They want to see predictable inputs and outputs, as this has proven to be valuable in having less repayment pain down the line.

That can be good for the borrower and the lender.

Many banks do not like ‘unsaved deposits’ or irregular savings from windfalls and the like. If you are self employed or have seasonal ups and downs, that can be a problem.

Loan Application Tip: Your Mortgage Broker will source your loan from lenders that allow unsaved deposits, gift deposits and parent help with collateral, and parent joint ownership options, including shared equity mortgage options.

Or your broker may use lenders that specialise in small business owners and the self employed if that is your situation.

6 a. You or your partner have a bad credit rating or history.

Bad credit is often result of breaks in income streams, because of the reasons listed in point 6 above. After all the bills don’t stop just because your income does. It might be a good idea to run a credit check to find out your credit rating and credit score before you apply for a home loan, not be told by the lender that your loan application has been declined due to a poor credit score. Many Mortgage Brokers are set up to give this service, or you can apply for a credit report from the major credit reporting agencies

Loan Application Tip: If you or your partner have a poor credit history your Mortgage Broker will have already performed a credit check, and may use a nonconforming lender, that lends to borrowers with past credit issues, usually at a higher interest rate, at least for the first one to three years. Some non conforming loans are good deals!

7. The home of your dreams is undesirable in the eyes of the Mortgage Lender.

We have talked about a poor appraisal coming back, and the home being under valuation. But lenders may also have policies on the type of property they require to be pledged as mortgage security. Problems can occur with unacceptable postcodes, residential property deemed rural, rural property over 5 acres, 10 acres or 25 acres.

Loan Application Tip: Residential mortgage loans cannot be used for working farms for instance. The smaller acreages would not be viable as a working farm, and therefore may be considered as “residential rural”.

Also ‘dual key apartments’, and “ultra low area” housing units may also be unacceptable to your lender. The central policy theme in rejecting these types of security is that the property resale may take longer than the specified time to resale [usually 3 months], should the lender need to exercise a mortgagee in possession sale.

In these cases your Mortgage Broker will assist you to find niche lenders that are comfortable with these types of security, or you may need to find a property that is more in demand that the type you have selected.

Summary

Mortgage Brokerage is normally a fee free service to the borrower. So using a Mortgage Broker to help you get your home loan approved quicker and easier makes sense. Mortgage Brokers can also save you from making these eight common loan application mistakes when applying for a mortgage loan. Whilst having your loan application declined may be overcome, and you can get a great home loan without using a Mortgage Broker, why deal with the stress and bother when a Mortgage Professional can take care of everything for you and do things right in the first instance?

Why Use the Services of a Canadian Mortgage Broker

If you’re looking for a house in Calgary or across Canada, a mortgage broker is someone who can assist you in this task. Your task becomes much easier if you have the right type of mortgage broker, who is skilled and experienced. This way also allows you to save some time and money, while getting the best deal. It is also necessary that your mortgage broker is registered. A mortgage broker earns per loan sanctioned and acts as a middle person between the customer and the loan officer.

Essentially the mortgage broker has to assess their client’s needs, make sure that they meet all the requisites for a mortgage and then proceed to evaluate the market so as to find the best possible deal for their client. A lender form is filled by them and all the required documents are collected by them and then submit the application the lender, along with all the pertinent documents.

If there are any issues related to your mortgage that you are unable to comprehend, it is the duty of the mortgage broker to explain all this to the client. So, the services of a mortgage broker are going to be a big help to you. In terms of mortgaging products, mortgage brokers are considered as perhaps the larges contributors to the lender’s profits.

Your probability of landing a loan is much higher, if you go through a mortgage broker as against going alone. Moreover even with refinancing or a purchase for a second property is increased with the assistance of a mortgage broker.

Provincial laws and policies in Canada, govern mortgage brokerage there. Various organizations such as the Canada Mortgage and Housing Corporation (CMHC), plus the real estate Council of Alberta (RECA) make it a point to see that the mortgage loans that are made available in Calgary and across Canada at a relatively low cost.

It’s easy to get conned or duped, be sure you verify the credentials of your mortgage broker. You can also check with the licensing bureau, if your mortgage broker is indeed registered. Nowadays, it’s difficult to tell authentic and genuine brokers, so take your time in choosing the right mortgage broker. The correct mortgage broker could go a long way in helping you land the best possible deal.

Most of us would not be expected to know in know all the legalities and formalities of a mortgage, at such times the services of a mortgage broker is most important.

Opting for the best deal, which is the best for you, is important. A mortgage broker with his or her experience will be able to guide you with regards to getting the best deal. There are many types of mortgage brokers available, you can also check with the Canadian Association of Accredited Mortgage Professionals. This is the national organization that represents the mortgage industry in Canada. It is the largest network in the country and you thus have a large choice to choose from.

You can be more selective and choose as per your requirements and needs. With the right mortgage broker you can be assured of reaping the benefits of the best mortgage deal.