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Thursday, 31 October 2013

What are the benefits of having a good mortgage broker

What are your options when you are looking to finance the biggest purchase of your life? While there are different types of loans available; one of the first things you will need to determine; want to work with a mortgage broker or with a bank. Here's a look at some of the benefits associated with working with a broker rather than a bank:

Benefit #1: A Broker Works for You

Perhaps the greatest benefit to working with a mortgage broker rather than a bank is the fact that the broker works for you. Go to a bank to secure a mortgage loan, the banker is solely concerned with the interest of their own. The mortgage broker, the good one, is looking out for your best interest as he or she searches for the mortgage that is best for you represent your needs and not of the lender.

Benefit #2: Choose from a Wider Variety of Institutions

When you go to a bank to inquire about a mortgage loan, the bank specialist is only representing his or her bank. When you work with a mortgage broker, he or she works with a wide variety of different institutions. As a result, you have a broad range of loan options to select from. Not only can this help you get the best rates, but it also increases your chances of obtaining approval even if you have poor credit.

Benefit #3:Brokers are Highly Trained

While bank specialists do not require any formal training or license, mortgage brokers must have the smart, experience and the education what you will get in a package, increasing your chances of getting approved.. In fact, most Provinces require mortgage brokers to meet a strict set of requirements, mortgage brokers must be licensed and must complete continuing education courses in order to remain licensed In Canada. As such, you can be sure the mortgage broker you work with is current on the latest real estate and mortgage financing rules and events.

Benefit #4: Reducing Credit Report Inquiries

When your credit report is pulled by a lending institution, your credit score may take a hit. When you work with a broker, your credit report only needs to be pulled once in order to recommend the best options. If you go to multiple banks, on the other hand, your credit report will be pulled each time you inquire into a loan.

Benefit #5: Submit Your Information Only Once

Convenience and easy to obtain a mortgage when you have a Brokers work for you and it all can be done by phone, fax, email. After you have submitted all of the necessary information to your mortgage broker, he or she will pass all of the required information on to those mortgage lenders that might be a good fit for you. As such, you are able to submit your information to multiple lenders while only filling out the necessary paperwork one time.

Benefit #6: Free no obligation consultation

After all, you need to be informed and have some knowledge about the process of getting a mortgage. Most importantly, a mortgage broker, a good one, will be able to provide you with a plan, help you to expedite the plan and work with you on a solution as well.

Remember, interest rates are not the most important part of your mortgage. It is important, however the product must match your individual circumstances and needs and not of the lenders.

Wednesday, 2 October 2013

Mortgage Brokers 1: Are you familiar with Private Mortgages?

Wow, how hard can it be to broker a private mortgage, how much and hard do I have to work on a file like that; I have a borrower did not fit last week at the bank, but I know a couple of private lenders, just throw it at them and it will be just dandy to collect a nice fee, for doing nothing. Well, hold your horses, cowboy, I have got news for you. It is not that simple. Private individuals are more careful and more picky than the banks are. Banks set guidelines and they have their employees follow them, I mean Underwriters... Of course private do not have a stringent lending criteria and overlook bad credit, even some can be talked into not so hot location, however the property has to be appealing to them. With private lenders, nothing carved in stone, besides they are charging fees and high rate all adjusted to the risk factors like:

1.       Clients credit, what is in reality not a disqualifying factor, but sends rate higher as bad credit is indication of, you are a risky borrower
2.       Job situation also not the main priority in make a decision for private lender, but certainly can play to set interest rate higher or lower
3.       Property location is important as some markets are just slow, making property to be sold in case of foreclosure a long time, thus biting into equity
4.       Property curb appeal and marketability, like older less appealing properties are harder to sell
5.       LTV is very important, higher it is, higher the fees and the rates are, adjusted to the degree of risk again….

As you can see, there is no free ride for any of your borrower, however there is a chance to get funded if there is a strategy to maintain mortgage current at all times and coupled with a strategy to exit the mortgage by refinancing and or other means.

I will write about private mortgages and as a private lender myself, will give you more insights into how investors think and what makes them to go to your direction, it is more complicated, but manageable and your commission will be generous.