May 15, 2014
We have all been educated that shopping for a mortgage and getting lenders to compete against each other is smart business. How many lenders do you know or trust? A mortgage broker will know many more than you. This is just one reason for using mortgage brokers. You probably know of a few banks, but do you know their lending criteria? An experienced mortgage broker will know which lenders will get your deal done. Mortgage brokers will also package you and your loan in a proposal that gives you the highest chances of approval. If there is a weakness in your loan a good mortgage broker will recognize this ahead of time, and try to mitigate it so that the transaction will qualify.
Lending used to be a relationship and a character-driven endeavor. The banker was looking to build a loan term deposit and loan relationship with borrowers based on their good characters. Today commercial banks are highly regulated by the FDIC, and approving loans that will not create problems with their regulators is their highest priority, not the quality of your character or the value of your deposit relationship. An experienced mortgage broker will know other national and even private sources of funding that are not highly regulated like community banks are. He/she will most likely have a relationship with these lenders and know their underwriting guidelines, which will save you a great deal of time in finding the right lender. Furthermore, the mortgage broker will have a relationship with the lender that is built on trust from previous completed transactions.
A client of ours recently had his bank turn down the refinance of his commercial office building when the loan term was up. He was shocked, as he had never been turned down for a loan before and had never missed a mortgage payment. His bank told him that he had to get the loan refinanced elsewhere in 60 days or they would fine him $40,000. He told us he hated his bank for treating him so badly. But his bank was between a rock and a hard place. The business that occupied most of the borrower's office building had shown a loss on tax returns the previous year, and his tenant that had occupied 25% of the property had moved out. The federal regulators would have required the bank to put up very large cash reserves if they kept this loan on their books.
At Apartment Loan Store and Business Loan Store, we are mortgage brokers and mortgage bankers. We have been in business since 1997, have an A+ rating with the Better Business Bureau and a 97% success rate of closing our loans. We close our loans as proposed because all criteria on each deal is run ahead of time (before we take a deposit from you) by the underwriter and the credit officer that will be approving your loan. We have a relationship with these decision makers based on years of working together.
By Terry Painter, President