Published by Trey Stone on
Oct 21, 2020 2:43:00 PM
The Role of a Mortgage Broker
A mortgage broker is an intermediary between a real estate investor or investment group and a lender. Mortgage brokers bring the borrowers and lenders together without investing in the property themselves. They provide services to an investor that are invaluable and enable investors to maximize their profits on a real estate deal.
Trey Stone explains the top benefits of working with a mortgage broker rather than working with a lender directly.
The Benefits of Using a Mortgage Broker
Mortgage Brokers have the resources to package a comprehensive investment summary.
An investment summary typically provides information about the property, the business plans for the property, and how the loan would contribute to the income from the property. Mortgage brokers have access to up-to-date market information and comparables which are important to potential lenders. An investment summary packaged by a mortgage broker is a much better resource than anything an investor can put together without their resources. The summary helps secure the loan but Trey Stone also uses it to present to his business partners in an investment deal. He finds this single resource invaluable and it serves a dual purpose.
Knowledge is power.
You may gain some insight from an investment summary and the associated research from the brokerage firm that you may not have otherwise gained. This can help with contract negotiations on a deal. For example if the mortgage broker uncovers unfavorable comparables, you can go back to your seller and leverage this for a better deal.
The more loan offers, the better.
Working with a mortgage broker increases the number of loan offers because the brokerage firm sends out the investment opportunity to many lenders at once. If you went to a lender directly as an investor, you will only see the offer from that single lender. You could of course visit multiple lenders and compare offers but a mortgage broker is able to access many more lenders in one swoop. This enables investors to choose the best loan offer for their needs.
There are lenders that you may not have access to.
Mortgage brokers have a book of contacts that investors may not even know about. These contacts can be individuals or organizations looking for investments. Working with a mortgage broker gives you access to a broader network of lenders expanding your loan options, and providing more potential for your income on an investment.
With options, comes choice.
By reaching a large network of potential lenders and receiving multiple loan offers, you will then have to choose the best loan for your business plan. A mortgage broker can serve as a consultant and advise on the best loan. They have an understanding of your needs from the initial research and investment summary and they have experience working with various loan types and offers. They can lay out the differences in a clear and concise way to make it easier for you or your investment group to choose. The right loan can make or break an investment.
Your Success Depends on your Team
Finding the right deal at the right time in the right market is of course extremely important. Something that is often overlooked, however, is the importance of the team you work with. The people you do business with can elevate your potential. Working with a mortgage broker is certainly one of the ways to accomplish this.