Shop Around For Your Mortgage
By Paul Esajian on November 4, 2013
The mortgage landscape is constantly changing, as loan programs appear to come and go on a daily basis. In order to best take advantage of these programs, at the very least, you need to know which ones are available. Even if you have worked with one lender on a few deals, it is beneficial to keep your ears open for any new programs that may fit what you are trying to do. You may not be actively looking for a loan now, but you never know when you will take advantage of a niche program down the road. Be sure to shop around for your mortgage.
When the mortgage market was at its peak, it was not uncommon to work with a brokerage who had access to 30 or so lenders. Each lender had a different niche which ranged from stated income programs to lower down payments and reduced underwriting guidelines. Needless to say, most of those lenders are now out of the business, leaving only a few core banks left. Most of the programs these big banks have are very similar, but we are starting to see more local banks and even a few niche banks starting to step out of the box and come up with different programs.
In order to take advantage of this changing landscape, you need to network yourself with as many lenders as possible. Reach out to your local banks and mortgage broker companies and tell them you are an investor who would like to be made aware of any new programs that they come across. Even if the programs are not investor related in nature. You never know when you may have a tenant looking to buy one of your properties or a buyer on a listing looking for financing.
Once you make your introductions, come up with a spreadsheet for each lender and what their investing niche may be. Some may offer 20% down for multi-families while others may use rent to qualify. There are dozens of minor changes that could separate one lender from another and have a big impact on your deal. Even the slightest change in underwriting could mean the difference between approval and denial. With each positive, a program will surely have an equal negative. You may find the perfect investor program, but it will take 60 days to close and the fees are high. You need to weigh each positive with each negative and once you have all your options make your decision.
Programs may also be different, regarding selling or refinancing . These programs and underwriting guidelines can change at a moments notice. If you are thinking of using one lender, call and make sure they can still do it. The more options you have in your business; whether it’s with realtors, contractors or mortgages, the better your business will be.
It is ok to use one lender for one niche and one for another. Loyalty is an important part of any business, but you also need to give yourself all of the options to be successful. Reach out to as many lenders in your area as possible and find out all of the programs they have available. You never want to miss a deal because you didn’t have access to a loan that you could have done.