“Why Use A Mortgage Banker?”
This is a great time to be purchasing commercial real estate. Interest rates are low and lenders are aggressively trying to win deals. The question is, however, is it this this best deal available and will it close? As rates start heading north, this is a unique opportunity to lock-in a low rate for a long term. The benefits of using a professional mortgage banker will help a borrower locate a loan that works best for the borrower, ensure the loan closes and weed out the lenders that could either re-trade a rate just before closing or not close at all. Mortgage bankers have expertise doing this. They have the ability to structure deal terms, have the relationships with multiple lenders and can service the loan after it is funded.
Refinancing or acquiring a new property takes time and money. A mortgage banker is similar to an unpaid employee and is not paid unless a loan is arranged and funded. Mortgage bankers are able to leverage relationships to create an auction between lenders interested in financing to ensure the best rate and loan terms possible for the client. This can create more loan dollars and more flexible terms for a borrower. Lenders know mortgage bankers use relationships to their advantage and know they have to quote the best terms upfront. It is proven that when borrowers talk directly to lenders they don’t always get market or better than market quotes.
Mortgage bankers have long-term servicing and loan placement relationships with lenders that help clients improve structuring and pricing. Having a relationship with a mortgage banker can help a client obtain better rates, more document flexibility, and possibly reduce reserves and escrow deposits, and obtain a few more loan dollars. A mortgage banker who knows their borrower, the property type, and industry will know which lender is best suited for the transaction. Mortgage bankers have a diversified portfolio of lenders to shop each deal and know where to shop to save the borrower time and money and might even have an exclusive relationship with certain lenders. Mortgage bankers understand their lender’s underwriting criteria and will structure the borrower’s package to best suit the needs of a borrower.
A mortgage banker’s responsibility is to provide important useful services. Depending on the deal, terms can vary tremendously and an experienced mortgage banker uses this knowledge to the borrower’s advantage. The mortgage banker has expert knowledge of a market, including local lending requirements. Depending on the lender mortgage bankers are also able to service loans, collect monthly payments, pay property taxes, keep escrows current, and be sure payments are disbursed to the lender. Servicing is a major part of a mortgage banker’s job.
A lot of time and energy is spent closing a commercial loan. Real estate investors should concentrate on buying properties and have a mortgage banker worry that the deal is committed and closed. Most borrowers hire accountants to help keep their internal book straight and a professional mortgage banker to help steer the loan to closing.
Next time you are thinking about buying a property, call someone who places loans for a living . . . it will save you time and money.
By Andrew E. Margolis
Draper and Kramer Incorporated
(312) 795-2507 – Direct
(312) 795-2707 – Fax
Margolis@draperandkramer.com – E-mail