Shopping for lenders can be a time-consuming process. Even more so, once you think you’ve found the best option, the process can be a grind. Let’s be honest – who really enjoys the loan process? We enjoy saving money and making money and getting a loan is just a means to reach a goal. But there aren’t many people who would describe the process as something they enjoy doing.
That’s where a mortgage broker can be a great asset. A broker is a bridge between you and potential lenders to find the best mortgage program for you. Working with a broker can streamline the process and avoid common pitfalls that an unknowing borrower might encounter when working with the bank. They are able to leverage their relationships and resources to negotiate the best financing for your specific situation.
A broker can help make the process less complicated. Less demanding. Less time-consuming. They use their expertise to strategize and present your information properly to avoid hiccups or issues. At the same time, they work with you to understand the process better. A mortgage broker has the benefit of doing loans on a daily basis and having long-standing relationships with the lender, and, in most cases, significant loan volume which gives them more bargaining power.
Here are some reasons why a mortgage broker can be a powerful asset.
Relationship Between Brokers and Lenders is Powerful
When working with a mortgage broker, you can take full advantage of their relationships with multiple lenders. These established relationships with so many lenders are beneficial as your broker knows how they work. Your broker knows lenders:
- Are particular about who and what they will lend on
- How your information should be presented to secure a loan
- What programs the lender(s) may offer
These relationships between lenders and your broker are very reciprocal as there tends to be a high volume of deals they work on together. This is a win for you as lenders are more likely to work with you because of that relationship. Their relationships can even make the process easier and clear-cut due to their shared history.
Another advantage of the broker-lender relationship is your broker can tell you which lender would be best in your situation. Your mortgage broker will present you with options based on your situation and guide you through the pros and cons of each lender and program. A broker can also advise you on strategies and a roadmap to attain your goal if you can’t readily achieve them right away.
A broker can also be helpful if any issues arise during the loan process especially when it comes to the coordination between all parties. Having a track record with the lender and an established relationship can ensure that if an unexpected issue arises, they can solve the issue right away.
Sit Back as the Broker Drives
While broker-lender relationships are beneficial to the process, one thing that those relationships cannot protect you from – mountains of paperwork. The forms can be long, confusing and time-consuming. That’s where your mortgage broker comes into play. They can help you with completing the forms, take the guesswork out of it and oftentimes complete the forms for you so you just have to review for accuracy and sign.
Your broker works with all parties in the transaction – including brokers, escrow and title – to make the process as painless as possible. If you’re working with a local mortgage broker on a purchase, chances are they know and have worked with the real estate broker and even the property manager on other transactions. In many cases, we’ve helped our clients get an offer accepted just by having a relationship with the broker by giving them the confidence that we will perform given our track record and expertise.
Again, the business volume between your broker and the lender makes this process much smoother and accessible for you.
Takes on Guessing Game Headaches
With your mortgage broker driving your deal, now, you can leave all the demanding work and negotiations to them and your real estate broker. Your broker is on your side. They make sure your deal is structured properly. They do this so you can:
- Maximize the loan amount
- Get the lowest rate and best terms
- Foresee and work through any issues that may arise
Mortgage brokers have relationships with several, often hundreds, of lenders and know which lenders are best suited for your needs. Their lender relationships typically include large banks, small or mid-sized banks, credit unions, agency lenders, conduits and sometimes life companies. Some of these lenders don’t work directly with borrowers or charge a fee to work directly with borrowers.
Knowing the Loan Workarounds
There may be issues you need to work on prior to moving forward with financing. It could be something small and easy or it could be an issue that is more complex. A mortgage broker can advise you on what needs to be done to achieve the best financing. In many cases, it could save the transaction, save you thousands of dollars and reduce the level anxiety and stress that comes with them. Common issues we see and advise our clients on include:
- Credit issues
- Issues with the property
- Income eligibility, etc.
A broker will not only work through those issues but structure your deal to help you the most. They act as an advisor to help you meet certain needs to qualify for financing. Usually, you and your broker will discuss and work on creative financing solutions.
Just remember, picking the right mortgage broker is like finding a spouse. The relationship must be equal parts comfortability and loyalty to create a favorable partnership. You need someone who will work with AND for you to make the buying process and painless as possible. You want them to partner you with a lender that fits your needs. You want them to prepare you and make sure you understand the terms and expectations. And that’s where Pacific Shore Capital comes in. We can be your real estate spouse (without all the extra stuff). We’ll make sure we find the best program for you and guide you through the process. If you want more real estate info and advice, can check out our podcast.