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Mortgage Broker Myths: Busting Your Borrowers' Favorite Wise Tales

With all the rumors and misinformation surrounding brokers — it’s no wonder why the market seems treacherous. Half the battle of being a broker is simply educating your community on what it is you do. Whether co-worker, family member, or nosey neighbor — everyone seems to be an expert on the market and what exactly a mortgage broker does. Luckily, we have our ear to the grapevine. We know the tales being told around campfires.

Here are some of the myths circulating brokers and (more importantly) how to dispel them when you come across a disenchanted borrower.

Myth #1: Brokers Offer Fewer Product Options

Anyone who remotely knows the mortgage space knows this is a myth. ESPECIALLY if you are a Fairway Wholesale Lending partner. This may seem like a simple selling point for your clients, but you do have the unique ability to offer all kinds of options. Brokers can offer more products than any retail lender or big bank. Quickly dispel this myth and let your potential borrowers know you are the one-stop shop for mortgage shopping. You eliminate the need to visit multiple lenders and shop multiple rates for (hopefully) a single approval.

Bonus point that your fairy tale clients might not know:

No need to damage their credit with multiple hits; they only went to one person to secure the best loan — you.

Myth #2: Why Must Brokers Take So Long to Close?

One of our favorite wise tales is the story of Jude the Broker who took 41 days to close on a traditional FHA loan. The fable is told in bank lobbies across the world. Some people still believe it to be true. The reality, however? Brokers close in half the time it takes major banks and lenders to close.

According to Ellie Mae Mortgage Origination (Jan 2019), the average time to close a mortgage is 45 days! What a treat it will be when you tell your potential client that the average closing time with a broker is 21 days? 21 days from the moment they pick out their dream home to the moment they start filling up the living room.

At Fairway, we take pride in getting our partners’ loans to the finish line in record time. No myths here.

Myth #3: Brokers ONLY Focus on The Lowest Rate

Most homebuyers (especially inexperienced ones) believe the interest rate is the mother of all statistics. It’s the number they need to hone in on. Whilst this is true to a degree, your job as a broker will be to look further than just the interest rate. Mortgage brokers like yourself are experts at finding ways to get an application approved.

This common misconception could potentially hurt your future homeowner.

Here is an example:

You get a newbie homebuyer who is adamant about finding the lowest interest rate. You shop around and find the lowest rate for them. Next thing you know, their application is getting declined. They come running to you for questions — only to find out their expenses were too high, income too low, and savings were non-existent.

Fun fact for your client: Gathering new documents after an application is declined could add weeks or months to the process.

Reassure your borrower a low rate is not always the past best taken. Understanding their circumstance and financial situations is the best way to get their application approved.

 

 

 

 

 

 


  • Published By: Jordan Morales
  • Date Published: December 08, 2021

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