Nick Peacock, Beazer’s Vice President of Lender Choices, answers your questions about shopping for a mortgage.
In this edition of “Ask Nick”, Nick explains the advantages and disadvantages of borrowing from different sized loan companies, the reason lenders charge different rates, and the type of documentation banks require.
Q: Bonnie: What are the advantages/disadvantages to going with a small loan company vs. a large one such as Bank of America, Wells Fargo, etc.?
A: At the end of the day, the loan officer who handles your transaction will be the most important factor. Whether you plan to take out a loan with a small mortgage company or large bank, you can generally assume that either entity is capable of funding your loan – so it really comes down to service. Large companies are sometimes slower to react to problems, and are sometimes less flexible with their underwriting guidelines. Sometimes the large banks will offer bundled services that may be attractive to some borrowers. My advice is to find the person with whom you are most comfortable and who also has the product and the rates you are seeking.
Q: Sarah: Why are different lenders able to provide different rates?
A: While the secondary market prices dictate general interest rates for mortgages, lenders are responsible for setting their own prices. While lenders are fairly competitive with one another, seeing a difference of a quarter percent from one lender to another is not uncommon. Like any business, mortgage lenders have different overhead structures and profit targets, which ultimately dictate their pricing strategy.
Q: Michelle: What type of documentation are banks requiring today?
A: In today’s lending environment, documentation requirements are rigorous, but not unreasonable. Borrowers generally must provide:
- 30 days worth of pay stubs
- 2 years of tax returns and W-2s
- 2 months of bank statements
- Documentation of any assets that are being used for the purchase.
Borrowers are also required to address and document any non-payroll deposits on their bank statements, and will be asked to address or explain any fraud alerts or other discrepancies contained on their credit report.
We’re always taking your questions! You can email them to us at AskNick@beazer.com. Nick answers every question, so you’ll be sure to get a personal response. Every week, we’ll post some of the “Ask Nick” questions and answers on our blog, Facebook, and Google Plus. Don’t forget to follow along on Twitter with the hashtag #AskNick.
* Beazer Homes is not acting as a mortgage broker or lender. Homebuyers should consult with a mortgage broker or lender of their choice regarding mortgage loans and mortgage loan qualification. ©2013 Beazer Homes