CalPERS Loans for CalPERS Members

There are a few ways to apply for a mortgage. But first you need to choose a lender. You have a few options here as well. Here are four of the top options:

1. Direct Mortgage Banker
2. Mortgage Bank
3. Credit Union
4. Mortgage Broker

A direct mortgage banker is a mortgage company that uses their own credit lines known as warehouse lines of credit, to fund your mortgage. They will have in house staff who will process, underwrite, prepare final loan documents, fund the loan, and ship it to the investor when ready. Most of the time you will get your first mortgage payment from the investor not the mortgage company that funded the loan. Many mortgage companies operate as mortgage bankers.

A mortgage bank is would be a mortgage division of an FDIC bank. Either federally or state chartered. You know the names, Wells Fargo, Chase, Bank of America, etc.. These companies loan their own money as well. The difference is that many of these mortgage banks will choose to retain the mortgage servicing. So your mortgage payment will stay with the company who funded your loan. The actual loan may have been sold off to another investor or packaged into a mortgage backed security and sold on the secondary market. You will not know that this happens or when it happens as you they will still retain the servicing rights to your mortgage loan.

Your local credit union can also originate, process, underwrite and fund your mortgage loan as well. Some credit unions will keep the loan and the servicing on their books. This would be considered a portfolio loan. Credit Unions often limit the type of loans that they will originate and fund. For example, some Credit Unions will not fund FHA or VA loans and choose to stick to conventional financing only.

Mortgage Brokers are another option. With a mortgage broker, you have someone working on your behalf who will find a mortgage wholesale lender or mortgage bank who has a wholesale division. They will then lock your rate and terms with that lender and submit the processed loan to them for underwriting, docs and funding. The mortgage broker will get compensated by you, the lender or both.

Well there you have it, four options to choose from when looking for a mortgage lender. I am not saying one is better than the other, just know the difference, know what type of loan you want and qualify and shop them to see which one is best for you... Now lets look at the loan application options.

Once you have decided on your lender, you will need to complete and submit a loan application. The standard from is a Fannie Mae form 1003.

Lets look at the options you have.

1. Online loan application. You can complete your online loan application on your lenders website. With this option all of your information will be downloaded and will print out on the Fannie Mae form. More borrowers are opting for this option since most mortgage shoppers start online.

2. Mail, Fax or Email. You can print out the Fannie Mae form and mail it, fax it or email it back the completed form to your lender. The mailing option may take a few days longer to process.

4. Face to face loan application. Setting an appointment to see your lender may be a good option for you. Most lenders will want to complete the application and process it before you meet with them. However this is not mandatory. Some borrowers want to ask many questions before they apply and get more comfortable with the process first. This is OK! If that is what you want to do then just ask for the appointment.

5. Phone application. Many borrowers will just complete the application over the phone. This can take as little as 10 minutes to complete and you could have a pre-approval before you hang up.