Lean On Mortgage Broker For Status On Your Loan Application

However, before you submit your loan application the mortgage broker should quote you the loan terms currently available from various lenders. It is not unusual for mortgage brokers to represent 20 or more lenders, often out-of-area lenders with better terms than are available from local lenders. Ask the mortgage broker for quotes of the best available terms for the mortgage you want. Write them down. Ask if they can be locked in now or if you have to wait until your loan is approved.

The advantage of using a mortgage broker is that you have access to many lenders instead of just one, if you borrowed directly from a local bank or savings and loan. But the disadvantage is that the mortgage broker doesn't represent the lender, so the mortgage broker cannot approve or disapprove your loan. The lender does that. However, many mortgage brokers can "lock in" the interest rate and other loan terms at the time the application is submitted.

Unfortunately, to get loan applications, some dishonest mortgage brokers quote loan terms that are not available. This happened to me several years ago. A broker quoted loan terms that I should have realized were unrealistic. After I submitted my loan application, the broker told me the lender changed the terms. But I knew an official with that lender and when I phoned him he told me the quoted terms were never available from that lender. The broker lied to me to get my application, hoping I would accept the best available terms.

However, the best mortgage brokers can perform finance miracles. For example, last year a mortgage broker found a jumbo loan for my tenants who wanted to buy their home from me although they only had a 5 percent down payment, including their lease-option rent credit. That loan was almost impossible to find, but the broker arranged it.

If your broker hasn't contacted you for three weeks, something is seriously wrong. Phone him immediately to ask what is the problem. If you are not satisfied, speak to the firm's manager. By now your loan package should have been completed, except perhaps for the appraisal, and you should have a written loan commitment contingent on the appraisal.

Q: Several weeks ago you answered a question from a homeowner who was remodeling and wanted to get a 10-year warranty on the work, just like the best home builders offer on new homes. You said such warranties from third-party companies are not available. That is generally correct except HOW (Home Owners Warranty Corp.) now offers remodeling warranties through their approved remodeling contractors. I learned about this program when we recently remodeled our kitchen.

A: Thank you for the information. At the recent National Association of Home Builders convention in Las Vegas I talked with HOW representatives. They told me the HOW remodeling warranty is a well-kept secret. I learned homeowners who want such a warranty can phone HOW at 214-402-7600 for the names of local remodeling contractors who can provide HOW remodeling warranties.

Q: My problem began four years ago when I bought a home in Minnesota. I lived in it with a close friend whom I trusted completely. A year later I received a job promotion and moved away, leaving my friend renting the house from me. Here comes the part where I should have been arrested for stupidity. My friend failed to make the mortgage payments on time. I learned this when I was rejected for a loan and was shocked to learn the payments had been late four times. My friend never told me there was a problem and the bank was ready to foreclose. I quickly paid all the late payments and for the last two years have been making the payments on time. Will I be denied a mortgage if I apply again to buy a house?

A: Most credit blemishes, such as yours, have a good explanation, which won't prevent the borrower from obtaining a new mortgage if the problem was corrected. Before you go house-hunting, I suggest you pre-qualify for a mortgage. Explain the problem up front to the lender. Most lenders will approve your mortgage if you have adequate income and no other credit problems.

(Copyright 1992, Tribune Media Services Inc.) Bob Bruss' column appears Sundays in The Times' Home/Real Estate section. Letters should be sent to Bob Bruss, Times Newsroom, P.O. Box 70, Seattle, WA 98111.