Happy New Year, HomeGainers!
One of my resolutions this year is to be more active on the HomeGain Blog. While I love to talk about marketing ideas, my self-appointed “title” here, if you will, is resident mortgage guru. I hope to expand my offering to you with a weekly column, more focused on mortgage financing issues that you, the professional real estate agents, face.
Supporting Direct Lenders:
At one point the brokers had most everything the banks had with very similar rates. Now it seems the brokers have more speciality type products but with higher rates and fees.
My advice to borrowers is to…shop around and find a lender you a comfortable with who has the product you need at a good rate. That may be a bank or may be a broker depending on your transactional needs and circumstances.
Mortgage brokers jump from one door to the next, also dealing with smaller credit unions etc. The bigger banks with the direct lenders have more room to move and manipulate a situation to the benefit of the borrower because they have that leverage when dealing with a large institute.
I put direct lenders up against brokers a number of times at the start of my career. This is why through 100% success of the direct lenders I have decided to strictly recommend them with confidence to my clients. My clients want and deserve the cheapest rate, piece of mind from there lender that they are secure borrowing from them and the best customer service in the market.
Supporting Mortgage Brokers:
An ideal mortgage originator will be able to clearly communicate to my clients the benefits of particular loan over another, or why it makes financial sense to choose one rate vs. another. He will provide several options for my client to consider.
A good mortgage broker will also have a broad understanding of the current financial market and how that may effect my client’s loan terms.
Above all, a good mortgage broker will keep the buyer’s real estate agent updated to any potential snags or delays. He won’t wait until the last minute or be unavailable to take calls on the day the loan is scheduled to fund.
Most importantly, as others have stated, you need to work with a lender or broker you feel comfortable with, has a strong reputation, and extensive knowledge of and experience in their field. If you find someone who fits that criteria, whether they’re a broker or lender, you’ll be just fine.
The answer I selected as “best answer” came from Bob Smith:
Finally, an answer from an investor, Wilton D. Alston:
Do you notice a common theme among all of the answers? That common theme leads me to this conclusion; don’t shop loan terms, shop loan originators. Relationships matter in residential real estate finance.
While I’d like to say I treat everyone equally, I don’t. Certain real estate agents are lower maintenance than others. They understand enough about lending to know if their clients are being treated fairly and prefer to have a funding source with a “get it done on time” attitude. They have “pre-qualified” a borrower on the phone rather than sending me a name and number. Their contracts are legible and they appreciate the updates we send on e-mail rather than calling me daily.
I call those real estate agents back FIRST because relationships matter.
I’d love to hear about your lending relationships.
PS: In the interest of disclosure, my employer, World Wide Credit Corporation is a correspondent lender and a mortgage broker. Google calls me “America’s #1 Mortgage Broker” so my bias is towards acting as a broker rather than a banker.