I recently had a conversation with a client who had just gotten loan approval and was still amazed that they got the loan approval because they had been turned down three times by their banks. They had been to the bank of America, Wells Fargo, and Credit Union; all three said no. When I explained that different banks play by different rules, some of them making the lending rules established by Fannie Mae and Freddie, FHA and VA tighter or more strict for their own benefit, the client started to understand.
Advantages of asking for a Brokerage loan
Disadvantages of asking for a bank loan
- Banks have to protect themselves, and if it means taking 30 days (the maximum allowable by law) to end up turning someone down for a loan, they are ok with that.
- The bank teller, loan officer and down to the last employee all get their pay from the bank, and so that’s where their “loyalty” is.
- Often these employees don’t know the guidelines, only what other employees tell them.
- I am convinced that banks keep employees in the dark on purpose; this was the case of every employee countrywide that I ever interviewed. They knew a tiny sliver of the overall process which benefited their employer.
- Going to a bank for a loan means one application gets you one set of guidelines. So if you don’t meet the bank’s loan criteria, then you have to start over with another bank.
“Why don’t they (Banks) just tell me up front I don’t qualify?”
- That’s a great question. The reason is that the teller, or bank loan officer is not authorized to approve or deny a loan, only give you an idea. And they are sometimes paid on the number of loan applications they take, even if those applications are 80% likely to get denied. The system is set up for the wasted time.
- Banks set rates and do not change them not only on the market fluctuations but also on their volume.
One day someone asked me why our rates were .5% lower than Bank of America’s. And I answered that they do not have to be competitive, they can name their price. So more than likely, they had too much business and were trying to slow down the flow of applications by having high rates, or they were profiting.
As a broker, we have wholesale rates and of course, need to compete for the business of the consumer and of the realtor’s referrals. Since we do not make money on overdraft or monthly banking fees. Learn more about Mortgage loans California.
It’s not all about price: Although the lowest rate and fees are essential factors in choosing a lender, that’s such a small part. It is crucial to Know the process, and know how to increase your credit score for better terms, being aware that you are being given the best rate for your property type and your loan type is essential. What you don’t know can cost you $$$ thousands.
Reasons why a broker is a better bet than a bank
- A broker gives you program accessibility, so why not go to a person who has access to all lenders instead of just one?
- Don’t you think if the banker knew of a better deal for you and told you about it, that they would get fired?
- When you want options, help with understanding your choices, the best price in a loan and hands on one – you want to go to a premier mortgage broker
Knowing that there is a program out there for you, is more critical than just rate. For example, I just helped a family buy a $450,000 home at a great rate. They had been told that they qualified for $280,000. So their realtor was shocked when I told them that I had them approved for $450,000. They were paying $2600 in rent so they definitely could afford more than $280,000. The realtor had referred them to a lender who isn’t familiar with working with business owners and had used the lowest income number in their profile. I was able to read and interpret their tax returns and get them the pace they needed. And $170,000 more in buying power. This type of knowledge is rare in a typical bank employee. Get more information at Home Loans in Torrance California.
From my point of view, I could work anywhere, and I would never work for a bank since it limits my ability to help people truly. Their rules, or overruling of the GSEs rules, and pricing, are most limiting and prohibitive. Contact Athena Paquette Mortgage Consulting for more information.