Mortgage Broker Support
“Importance Of Mortgage Broker Support For Private Mortgage Lending”
Today I want to talk about why you need to use a good mortgage broker when investing in private mortgages.
In my opinion, having an experienced broker is crucial to getting the return on capital you’re looking for and here are the main reasons why.
Get the Flash Player to see this content.
First of all, you want a broker who originates a fair bit of business and can provide you with the deal flow necessary to place your money in deals that are going to fit your criteria.
Not all deals that come along are going to be of interest to you for whatever reason, so you want to have a source of deals to choose from so that 1) you only place funds in deals you’re comfortable with, and 2) you aren’t waiting long periods of time in a cash position waiting to find a mortgage to invest in.
Deal And Risk Assessment
The second reason for using a good private mortgage broker is take advantage of their ability to do proper deal and risk assessment.
For almost any private mortgage that ends up losing money or even losing part of the original capital, the loss event could likely had been avoided when the deal was first assessed and risk of loss was analyzed.
Proper representation will uncover all the relevant facts about a particular deal most of the time, which allows you as a private mortgage lender to make better assessments of the deal so that any related offer you make to the borrower is not going to put you in a loss position down the road.
Private lenders want to clearly understand the reason why a mortgage request is seeking private funds. This doesn’t mean they won’t lend money if a few blemishes exist. But it does mean that the advance rate, cost, and terms are going to fit the deal according to the risk of loss it presents.
A experienced mortgage broker will be focused on providing you all the relevant information for the deal so that you know exactly what you’re getting into. And through experience, he or she is also going to know what to look for versus some one with less experience with private lending and investing.
Excellent Closing Process Skill Set
Once you have reviewed an application for funding and put out an offer to finance, then the next step is closing the deal.
This is another key area where a mortgage broker can add significant value to the process.
While some may think that once the deal gets to the point of closing, there isn’t much work left to do. But in many cases, the work is just getting started.
The mortgage broker is a facilitator of the closing process, making sure that all involved parties are completing their part to get the mortgage in place. This can mean working with appraisers, environmental consultants, accountants, property managers, and of course lawyers to make sure not only that all the lender requirements are being met, but also that any problems or issues are dealt with swiftly so that the deal doesn’t fall apart unnecessarily.
There is art and science to the closing process and having someone representing you that has done a lot of private mortgage closings is certainly a benefit to your private mortgage investing activities.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel