Illinois Mortgage Companies

Written by Beth Hrusch
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Finding the right financial institution to handle your home mortgage begins with an assessment of your needs. Anyone who has shopped for banking products and services can verify that banks and other lenders often vary greatly in what they offer potential customers. This being the case, it pays to do your homework when preparing to take out a home loan. The mortgage industry in each state is regulated by laws that govern the entire transaction from start to finish. This protects the interests of both parties during the transaction, and gives the borrower the best chance of getting the loan that suits his or her needs.

Mortgage Companies--Rules and Regulations

A simple way to define a mortgage company is to think of it as a company that is authorized to service real estate loans. Just like a bank, a mortgage company will charge a fee that covers all administration and paperwork costs. A mortgage company acts as the lender, or mortgagee, and retains a security interest in the property in exchange for the money lent to the purchaser, or mortgager. These companies can operate just about anywhere and have a large presence in the world of online banking. The lower cost of doing business online helps cuts costs, often making it less expensive to loan money.

All mortgage companies must be licensed in their home state. In Illinois, out-of-state mortgage companies are required to maintain a physical presence within the state by means of an office unless they have a net worth of at least $100,000 and obtain fidelity bonds. Illinois mortgage brokers operate under their own set of guidelines. According to the Illinois Residential Mortgage License Act of 1987, a company is a broker if it helps the borrower obtain a third-party loan which is secured with real estate located in the state. Thus, loans for the purchase of Illinois property can be obtained either through a mortgage company, bank, savings and loan or mortgage broker.

Bad Credit and Other Special Situations

A mortgage company can handle many different types of home loans. Some even specialize in damaged credit and bankruptcy situations. When an individual goes to a lending institution needing a home loan, one of the first things that the lender will want to know is that person's credit history. This determines the terms of any potential loan, including how much is lent and at what interest rate. Better credit means better deals for the borrower.

Of course, not everyone has flawless credit. Illinois mortgage companies will review a credit report in order to determine what kind of loan the borrower qualifies for. In general, a credit score of 620 or lower is considered bad credit. If this situation applies to you, then you should know your options when seeking a home loan. Also, there are also laws governing "bad debt" lending, designed to protect high-risk borrowers from exorbitant interest rates and unreasonably high lending fees.

Ultimately, the fact is that if you are considered high-risk, a mortgage company can still offer you a loan, but you may have to accept a higher interest rate. You may also not get as much as you need. A lender that specializes in bad credit lending may even be able to refer you to a credit counselor who can help you improve your credit while paying back a home mortgage.

Illinois Mortgages

Borrowers in Illinois should be aware of every aspect of the law, from the actual loan to the state laws regarding refinancing and foreclosure on purchased properties. For example, in Illinois, it takes about six to eight months for a person to actually lose a home due to non-payment or other circumstances. A good local attorney, preferable one who practices mortgage law, can help an Illinois borrower navigate these legal waters.

Mortgage companies are a valuable resource for anyone who needs to borrow in order to purchase real estate. A knowledgeable mortgage specialist will be up-to-date on all the state laws, and will be able to offer the borrower options tailored to his or her credit and needs. In Illinois, the purpose of the loan can determine which rules apply to it. Whether the loan is for construction, refinancing or property purchase, knowing the law will benefit both lender and borrower.

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