Real estate agents began specializing in different areas such as luxury homes, condos and waterfront properties a while back. Now, the mortgage industry is doing the same thing, meaning it could be easier for home buyers to find an expert who specialized on specific mortgages.
“There has been a consolidation of loan officers in terms of what they specialize in,” says Tony Trungale, vice president and branch manager at First Choice Loan Services in Austin, Texas. “It’s become very specialized. If someone is an expert in every kind of loan, it becomes so complicated.”
Lenders might choose to specialize in VA loans, mortgages for first-time home buyers, retirement communities, waterfront homes, buyers after divorce, self-employed buyers, USDA loans for rural buyers, condo loans or reverse mortgages. If someone is an expert in any area, it seems to become their reputation among title companies and real estate agents, Trungale says.
These are the lenders that tend to help home buyers the most when it comes to niche mortgages or less common mortgage types. Trungale began to focus a lot of his business on condo mortgages, especially the high-rise condos in Austin.
“I am a preferred lender on all six new high-rises here. I’ve been in business long enough that the builders and developers know me,” he says.
With their knowledge of the area and their connections, specialized lenders can bring a lot to the table for some home buyers. Finding out what mortgage rates are available near you is an important first step while figuring out what relatively unknown or niche mortgage product is best for you.
Specialized Lenders Can Increase Chances Of An Affordable Loan
The benefit of using a lender that is specialized in a specific type of mortgage is that they know the proper mortgage for each individual situation. For many home buyers, the difference between a good loan and the right loan can be important.
James Theel, a certified divorce lending professional at Finance of America Mortgage in Newport Beach, California, states that specialized lenders makes sense.
“These days, specialization on the lending side is needed. It helps the consumer to have someone that truly understands their situation,” he says.
After a few years of helping clients who were going through divorces and after he went through his own divorce, he decided to get certified through the Divorce Lending & Real Estate Association. He is now a Certified Divorce Lending Professional.
Understanding each individual’s situation is helpful when finding the right mortgage. At the end of the day, home buyers want to be sure that their lender is on the same page as them. Lenders like Theel can offer the right perspective when approaching home buying. They will give you a better idea of what mortgages might better suit your personal needs.
Also, lenders that are specialized may have a better idea of what the best mortgage option is for you in your area. While an FHA loan may offer low mortgage rates, perhaps a USDA mortgage would be a better fit based on geographical location.
Finding out what rates different lenders can offer may help narrow down the search for the right lender and mortgage type.
Finding The Right Loan And Lender
When looking for the right lender to handle your mortgage, it could be important to first figure out what type of mortgage you are looking for.
For example, some mortgages will offer specific benefits to those that are eligible.
One such mortgage is the FHA loan. FHA loans are well known for requiring low downpayments and having low mortgage rates. Home buyers only need a credit score of 580 to qualify for an FHA loan, and downpayments can be as small as 3.5 percent.
Another mortgage type that home buyers should be aware of is the VA loan. The VA loan is offered to those who served in the armed forces, and it is even offered to their spouses.
VA loans are the best mortgage available. They do not require a downpayment and they have some of the lowest mortgage rates available. If you believe you are eligible for a VA loan, be sure to check your eligibility.
The USDA mortgage is another option, although it is rarely used compared to FHA and VA loans. USDA loans require a higher credit score than FHA loans, but they do not require a downpayment. These mortgages are only available in areas deemed “rural” by the USDA. However, these rural areas often include suburban towns and cities.
If you are searching for a home outside of the city, finding a lender that specializes in USDA mortgages could be a big money saver.
In many cases, home buyers are not sure where to even begin when it comes to searching for the right mortgage or lender. If this is the case, a good first step is figuring out how large of a mortgage you can qualify for.