Buying a new home isn’t a cake walk. Right from finding the right type of home to reading through the ownership contract, to getting the real estate buying finances in place, the entire process can be time-consuming and difficult. The finances related to buying a new home not only include the purchase price of the house but also has other costs such as the hard costs (repairs, upgrades, renovations, remodeling) and soft costs (leasing commissions, legal fees, broker commissions, loan acquisition costs).
Let’s take a look at some available sources of real estate buying finances.
Your own bank can be a great source for real estate buying finances as they issue more mortgage loans than any other source. These banks act as the intermediaries and lenders for the loans. These banks provide financing for permanent real estate purchases that involves short-term loans for six months to three years and to smaller home improvement loans. Also, just because you are a part of your bank’s customer list doesn’t mean you’ll be granted special benefits. The rates may differ and even be higher than other sources.
Mortgage Bankers And Brokers
Both, mortgage banker and mortgage broker are the middlemen that offer mortgage loans from another source, say a commercial bank or lender. A mortgage banker generally makes mortgage loans, packages these loans, and sells these packages to you or another lender. This banker handles the entire process, including accepting the initial application, approving the loan, and providing the finances for the mortgage. On the other hand, if you wish to borrow from certain lenders or commercial banks you would need to go through a mortgage broker. A broker doesn’t approve the loan, nor do he/she use their own funds to provide financing. They just shop around for the best rate or send the loan to a lender who can approve a loan that another can’t.
The lenders, also known as private funds, can help if you can’t get approved for a loan to purchase a property. Several lenders have created savings and lending companies to make it easier for individuals with poor credit and those who are unable to seek funds from any other source. This should be the last option that you must consider as the lenders typically levy higher rates and fees and larger down-payment requirements than other sources of finances.
If you are looking for a reliable help to make your home-hunting and documentation easier, our real estate agents in Edmonton are just a call away. Call us at 780-478-5478 and discuss your requirements with us.