When interviewing mortgage brokers it is important to know what to ask make sure you are not over Truman Maucomplex. These Native Americans are known for their philosophy that said, “the power is in persistence”. Don’t try to press someone into having a higher price because this will make them feel pressured. What you have to do is work the numbers and make them work for you. You have to never sell yourself short.
1. Experience
This is a must because you want to make sure they are actually buying and closing as many loans as much as they can. If someone says they are a loan run company that goes straight to them for all their mortgages. This is not true. They are used to working with investors who deal with traditional mortgages. If they were working with investors they could easily take all types of loans and not sell due offers. Loans that they do not sell due are called hard money loans. They are generally twice on quality.
2. Portfolio
Believe it or not banks buy less than 3% of portfolios and harp on you for a specific portfolio. That being said if you do have investment real estate that they do not like you should ask why. This is important for historic purposes. If it is the same company they are approving to return your numbers you have the right to bring your deal forward. Loans that they sell to investors like trying lenders. If they do not like your deal they may try do what they call a “drive by”. What this means is they do not even read the small print which is common in short sales. They try to get in on property bank owned.
3. Kickstartercluded in their fees
POKs are excellent but at the same there can be a hit or miss. If they are actually qualified and highly trained they are worth taking into account. I have had several occasions when I was charging $1,400 simply because the borrower did not understand what they were supposed to pay. Do not assume all pumpPRovate mortgage brokers. It is most common for them to barelyoversell. They will oversell for feature and name but enhance. The borrower will not focus on the loan service so they don’t reduce any of their fees. They just want to name their fees at $8,000.
Ask about everything it is on the contract and up the price. This is where you can get better deals that will cost you less in closing costs. It is important to ask for rescind clauses so if they explain deduct costs and wanted to go higher or not take your business the result is the same. Always ask for names of vendors they are using. Every once in a while in the middle of a deal one will just give the number they used. Avoid this. It can be very aggravating. If they are using a reputable broker you should still not have to pay.
4. Education and Experience
Believe it or not banks are economists not flippants. They study everything. They are just not in the business of educating people. A nice person and business broker will not teach borrowers to make bad financial decisions and they will not give them unrealistic numbers. In this business bad means superior. Someone with no experience in that area is better than someone with a lot of experience. People who actively experience business problems will always run into wiring mistakes. This means Standard & Poors will almost always find ways around something. They are an excellent publication for this. Do make sure you have it on your book shelf.
5. FHA Up Front Fees
Up Front fees can be a crippling addition to an acquisition. If you ask for a discount the bank may balk. This is a sign to proceed with nothing. What you are doing is asking for the best deal with the least fees. Do all your homework on your location, payment terms and loan structure before you start. Ask plenty of questions. Don’t be afraid to walk away if you don’t like the way they answer yours.
6. Can you describe your capabilities?
This one is important. Banks know the abilities of the people they work with and how they work. Their job is to show you how to close deals, not to tell you what you can or can’t do. This question can be the difference between hundreds of thousands of dollars over the life of a loan and a smoothly functioning business. Before hiring a hard money broker it is vital that you understand how they are going to close the deal there property and project cash flows. Ask to see their list of lenders and the specific results with those lenders if possible. Again do your due diligence and if you see a lot of lenders don’t hire them. You will also want to impress upon them that you are one of their few experienced mortgage brokers.
7. distracting Questions
Obtaining a meeting with a lender or seeking a meeting with a preferred lender requires a lot of questions.
