Mortgage lenders look for “perfect loans” and if any imperfections exist, you pay a penalty, which comes in the form of higher interest rates or fees.
In order to secure a home loan, mortgage lenders evaluate your credit profile and the property you’re looking to buy. They review things like how much money you have to put down, how much money you make and your credit score. If you don’t meet certain standards, or the property has any imperfections, you’ll be penalized and pay more.
Now let’s get one thing out of the way…Every loan has imperfections. Let’s review a few examples:
- You make $1mm a year, have perfect credit and can put more than 20% down. You want to buy a condo in a building that has two other units and both those units are owned by the same person. The fact that one person owns more than half the units makes the condo imperfect and therefore only certain lenders will finance it.
- You’re a recent graduate from grad school, you have perfect credit, you make plenty of income and you’ve managed to keep your student debt in order. As a result, you don’t have enough money to put 20% down. This makes the loan imperfect and only certain lenders will provide you financing.
- You’re an entrepreneur with great credit, you’re putting 20% down and you’re buying a single family property in perfect condition. However, you own more than 25% of your company and your company is not profitable. This makes the loan imperfect and therefore only certain lenders will provide you financing.
There are thousands of permutations of loan imperfections and mortgage lenders exploit these imperfections by charging you more. The interest rate you get is based on your fit with a lender, which is one of the reasons why rates vary between lenders by as much as .50%.
At Own Up, we see all loans as perfectly imperfect. We help you assess your fit and find you the ideal lender for your particular transaction. We don’t deal with just one lender, we deal with a network of fully vetted lenders that are local to your market. On top of that, we’ve pre-negotiated discounted rates from the lenders in our network because they know we evaluate each borrower’s fit.
For our role in helping you to determine what lenders are best suited for your profile, how much you can afford and being your mortgage advisor all the way through closing, the lenders in our network pay us .30% of the loan amount. The traditional mortgage broker is paid three times as much (e.g on a $400,000 loan we get paid $1,200 by the lender when the traditional broker is paid $4,000). We certify that our lenders return the savings that come from working with Own Up back to you in the form of a lower interest rate, which results in tens of thousands in savings.
Your loan is perfectly imperfect and there is nothing wrong with that. We’re here to provide certainty that your loan will close, save you tens of thousands of dollars and serve as your advocate. We know that if we put your interests ahead of any single lender or any salesperson, you’ll be able to make a sound financial decision and that’s what motivates us to do what we do.