Over the years, I have received countless calls from commercial property owners and potential investors all asking the same question:
"Why do I need a mortgage broker? Aren't you a direct lender?" and so on.
Although we have strong correspondent lending relationships with many financial institutions, we also offer many other diverse property programs not covered by a 'one size fits all' approach used by many local banks. These programs require a broker relationship and produce closings that likely would never have occurred using traditional products. Most clients are unaware that even the banks are now brokering loans and charging origination fees in order to gain more market share.
Brokers provide an integral link to the closing of a transaction. A talented mortgage professional uses their expertise to properly prepare the loan package, present it for underwriting and ultimately get your loan approved, not to mention closed. I have closed many loans over the years where clients tell me they had been turned down previously by the same institution where we had gotten them approved.
It's all in the presentation, a well-crafted executive summary goes a long way with towards 'inking' that approval stamp the underwriter keeps under lock and key in today's market. When an underwriter receives a concise package with up to date financials and clear property photos, properly prepared for review, they are much more likely to approve the loan which is where a mortgage professional becomes an invaluable asset to the likelihood that you will get that lower rate, cash out and better amortization terms you were hoping for. For instance, I once had a client who had 4 partners who had all sent in their PFS (personal financial statements) in PDF format for lender review, or so I thought. I had forwarded the documents on to the lender only to receive a phone call one afternoon. My representative asked what the yellow paper with handwritten notes was thinking it was either a mistake or a joke. The client was busy running his business and had hand written his PFS in an effort to save time. Needless to say, the lender declined the loan and I never again sent out a document without reviewing it first. Always ask yourself 'Would you lend money to you?' If the property or the package aren't attractive to you, chances are a lender won't approve it.
The services of an experienced broker are invaluable. We know the terminology of the industry and which institutions have an appetite for a given property type and loan scenario. Run your business and don't drive yourself crazy trying to navigate another.
After the closing of a recent loan, the client called to let me know how pleased he was. He went on to explain that he had tried to get the loan on his own for almost a year and had all but given up, resigned to keeping an owner held note with a high rate and short amortization which completely limited his cash flow. He had gone to another broker who could not place the loan and had stopped returning his calls. Eventually he arrived on our doorstep and not only did we increase his amortization by 10 years, spreading the payment over a longer period of time and lowering his payments, but the interest rate was cut in half and we got him cash out for much needed property improvements.
The first thing most clients ask and the last thing they want to remember is that brokers are to be compensated. There is no such thing as a 'fee free loan', even at your local, neighborhood bank that is not only happy to charge you interest for 30 years but also charges a minimum of 1% origination, plus a percentage of the appraisal fee.
The combination of a lowered rate, better terms and more likely closing make a relationship with a professional broker not only a sound investment but a solid return on any fee paid to originate the loan.
Anita Huedepohl Liberty Funding 615.417.4710