You’ve heard it once and you’ll hear it again: buying a home is the biggest purchase most individuals will make in their lifetime. Before making that huge commitment, finding a home takes planning, communication, and lots of patience. While the house hunt can be nerve-wracking and sometimes heartbreaking, it’s all worth it when clients get those keys in their hands. Mortgage brokers can add value to their client’s experience by offering honest advice and guidance to potential homebuyers on how to best navigate this important decision – including being prepared with alternatives if traditional lending solutions are not an option.
The Usual Considerations: A Refresher
When advising your client on their house hunt, there are a few standard considerations that provide a good place to start:
Be Prepared with Private Financing Alternatives
As changes in government legislation have forced traditional lenders to tighten their mortgage lending policies, an increasing number of borrowers struggle to meet these stricter guidelines. The COVID-19 pandemic has only magnified this challenge. This is where a private lender, like CMI, can step in to fill the gap. As a private firm, we are not governed by the same financial regulations as traditional lenders, so we’re able to provide financing for borrowers that don’t fit neatly in the traditional lender box.
For self-employed borrowers or those with non-traditional or unconfirmable income, CMI offers a bundle mortgage, comprised of both a first and second mortgage. With the same pricing applied to both mortgages and only one set of closing costs, the bundle is not only cost-effective, but also allows for financing up to an 85% loan to value (LTV). Separately, the maximum LTV would be 70-75%.
Homebuyers with previous repayment issues may also face financing challenges. Those with low beacon scores (below 680) will find themselves shut out of the traditional market – and some areas of the private market. CMI is a make-sense lender. We provide creative, competitive solutions that can be tailored to your clients’ needs with no minimum beacon score requirements.
A private mortgage can also be a valuable option if timing is a concern. At CMI, our innovative technology platforms enable our broker partners to deliver the quick turnaround their clients need in a super-competitive housing market. Deals can be submitted in minutes and approved in less than an hour.
To provide the best advice to clients, working with a trusted private lending partner is a must. Not all private lenders are created equal, however. Mortgage brokers need to do their research to select the right partner to best meet their clients’ needs. That includes an understanding of fees. Late repayment penalties, application or administration fees and expensive discharge costs vary significantly between private lenders, and many charge the entire lender fee again at the time of renewal.
By preparing and guiding clients with the tools and education they need to find the right home, mortgage brokers can help clients hack the house hunt, while also creating an easier path to closing, adding to their value proposition, and encouraging referral business.
Submit your deals for review in under two minutes. We can get you approved within the hour, and financed fast. Contact your Brokerage Relationship Manager today or fill out the form below to get started.