Getting a mortgage these days can seem like a daunting task. Between the stricter lending standards and the lack of loan options, getting a tricky mortgage done can seem impossible. I am not talking about the standard cookie cutter mortgage for a good credit score, high-income individual. I am talking about loans for self-employed individuals, those with a credit ding or two, or any other number of special circumstances that come up. Many of these would be borrowers are worthy candidates and deserve the opportunity to buy a home as much as anyone else. So why is it so hard for them to get a loan?
The answer is clearly complex and has many variables… the economy, federal regulation, etc. But there is one other variable that no one seems to talk about and that I think has more to do with it than anything else.
Consolidation in the mortgage industry.
Over the last few years I have watched nearly every independent mortgage broker that I know be acquired by a direct lender or big bank. Think about that for a second. Independent brokers are the ones who get these tough loans done. Unlike the big box banks and the direct lenders, they do not rely solely on the products and the underwriting guidelines of a single institution. They are also not incented to steer borrowers to higher margin products… but that is a topic for another day.
An independent broker is able to have contracts with as many lenders as they want to do business with. The result is more options and more ability to get the tougher loans done.
Take just 1 minute to view this short video I made on the topic.
The next time you need home mortgage services, give a broker a try. You may be glad you did.
