In the past, many people considered going to a mortgage broker as a last ditch possibility to get financing after they had been turned down by the major banks. It was typically a more laborious and expensive route which led to a “stigma” around using a mortgage broker.
Even though banks still are the percentage favorite for the average person to go get a mortgage, the actual percentage of people using mortgage brokers is continuing to rise year over year. Statistics show over 40% of people go to mortgage brokers to arrange their mortgages for them, and rightly so.
Here are some “misnomers” about mortgage brokers:
- Mortgage brokers have access to over 50 lenders. That is true; however, if any mortgage broker is using that as a selling feature in order to use them, I would consider something first. It is the strong relationship a mortgage broker has with a few key lenders that enable he/she to get your deal done quickly and effectively. It is this relationship that helps some of those tougher deals get funded.
- Mortgage brokers can get every deal done. It is true that mortgage brokers can get many more deals done, when compared to going to a bank. This again is a result of the access to a number of lenders the broker has relationship and the way they can “position“the deal, meaning the best way to factually present your “story” to the lender. That said, even with the access to lenders and the relationships the broker has, if your situation is dire, then the alternatives to a decline by those lenders can make getting the loan very expensive.
- Mortgage Brokers know investor strategies. This is sooo not true. Very few mortgage brokers are able to understand the complexity investor deals typically possess and as a result are unable to get those deals approved. You must find professionals to work with in every aspect of your business to help move your real estate investing business forward.
Every investor should create a team of experts who are investors themselves. Each member of your team should be familiar with an investor’s unique requirements and as such are able to utilize those skills to facilitate your success.
That said when it comes to getting your deals financed, there are a number of potential strategies used when negotiating the purchase of a seller’s property, and your mortgage broker needs to be able to understand and structure your deal according to the existing laws and lending criteria to get your deal done.