Avoid Mortgage Brokers To Finance Your Vacation Home

I have had two transactions recently fall apart due because the Buyers did not use their own permanent resident Bank or a local Bank. You have a working relationship with your Bank; so negotiate the interest rate and or term. Second, the local Banker is familar with the marketplace and is not afraid of marketability issues that the Mortgage Broker who is selling the loan across the country does not understand. This alone is the single biggest problem in using a Mortgage Broker. The no doc loan becomes a full doc loan within days due to the Mortgage Broker's lack of knowledge within the market.

In my casse, the Buyer's agent had a pre-qualified Buyer to purchase one of my Seller's condominium units. The Buyers had a credit score of 780. Within a day before settlement the deal fell apart due to an unfavorable condo questionaire, that stated only one unit had closed as of the date of the appraisal. This issue was mentioned to the Buyer's agent who said it would not be a problem. Day before settlement it was a problem. Fannie Mae guidelines requires that at least 50% of the units be sold or at least be under contract. Another red flag for Fannie Mae is that no more than 40% of the units can be rentals. This problem could have been avoided if the Buyers had gone to their own bank or a local banker.

One the second transaction, the Mortgage Broker retained an appraiser from out of the area who didn't know the local market.It did not appraise. I supplied the appraiser with some units under contract which can be utilized as 4th and 5th comparables to support the sale price. Fortunately, for the appraiser and the Buyer's the deal will be saved.

By saving these two deals I would say I have earned my commission in a business were the public believes we make too much money.