Why can’t I just walk to into my bank and get a mortgage? Bank X is offering no cost loans, you can’t compete with that! The reality of it is, yes I can. Life is not always simple and straightforward, like many of these vanilla mortgage products offered by banks. 20% down with a 700 credit score and great employment income for 5 years with super low debt to income, will get you a 15 or 30 year fix with virtually anyone. Of course you are going to lose loans here and there to the banks, since they are the ones lending the money. If they want it, they will get it. But the reality of it is, they don’t want it, if they have to work ON IT. That is not a pot shot at bankers, as I will get to them shortly.
Fortunately, for our borrowers, that is where we come in. We will give you the proper guidance and consultation early on in the process, to match you up with the right investor for you. We act as intermediaries between you, “the borrower”, and the bank, which is lending you the money for your refinance or purchase. There are many distinctive advantages in using a mortgage broker versus a banker or loan officer, and I will highlight all of them in this article.
#1 Products and Services
BANKS
Walk into any bank in Colorado and you will be guaranteed to see there Marketing Posters hanging from the ceiling with their super low rate 30 or 15 year fix, and no interest Home Equity Line of Credit. That is it folks. No services beyond that, and definitely no products. Good luck qualifying on that as well!
MORTGAGE BROKERS
Not only do we offer way more products then bankers, our services are truly unique, and cannot even be compared with. To highlight some examples about making home affordable, some banks don’t even know what this is, and that is where we come in. If a borrower has a 600 FICO, they get kicked to the curb, because that falls outside the banks guidelines. That’s where we can work with our trusted network to get their credit score restored. Jumbo Loans above FHA and FNMA limits. Most banks don’t even know where to start with this. We have $100 down programs, classes to get you tax credits to qualify for a first time buy, loans for underwater mortgages up to 125% of your homes value with rates in the 4% range. Can your fat cat banker do that???? NO
#2 Education
BANKERS
I can’t tell you how many times a week I am either called or emailed as a recruiting effort to get me to work for a bank. You want to know what their huge selling effort is, on trying to get me to work for them? No education needed!!! Bank in every State!!! Don’t disclose your Yield Spread, or broker compensation!! Don’t pay for licensing fees and insurance!!! Sign me up!! NOT!
BROKERS
You might not realize this, but Colorado was one of the worst states to deal with predatory lending in the United States during the whole sub prime run up of mortgages and bank failures. The good news is, Colorado has one of the toughest mortgage regulations in the country, and many states have finally followed suit, in an effort to make this a very regulated industry. Since 2007, all Mortgages brokers, have been required to post certain net worth requirements, take state and national annual tests, put in classroom hours like a real estate agent, be bonded, be insured, and go through a criminal background check, just to be operational. We have more disclosures to sign off on to our clients, then banks do, and that is something I am proud of. So here are some sales tactics I will highlight that banks like to advertise to try and make you work for them.
- NO education needed. Wow! Giving a borrower guidance and consulting with one of the biggest financial decisions in there life, and you say, no education needed??
- Bank In Every State??? Why?? I love Colorado, and have enough business here to keep me happy at the local level, while gaining a strong reputation among people here in my community? When was the last time I did a loan in Michigan? Never
- Don’t disclose your YSP or Broker Compensation?? How shady can you get? I never lost a loan over commission, and think it is important borrowers see exactly what we are compensated so they can better shop around.
In conclusion, you should always get a second opinion when looking for financing on one of the biggest financial decisions you will make in your life. Granted, there might be some bank loyalty, and I understand that, however a qualified mortgage broker will give you expert advice and point you in the right direction, and keep you there. Always keep your options open.
