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Buyer Beware: Home Loans Under $50,000

An upset real estate agent was angry that his preferred mortgage broker wouldn’t do a loan for a client. Strange, I thought. Mortgage brokers typically get paid on commission – so if you’re not doing loans for people, you’re not eating! This agent was upset because he felt the loan officer thought the loan amount was too low and that the lender couldn’t make enough commission to make it worth his while. Upon further inspection, I found out that the loan amount was indeed under $50,000.

Now, loan guidelines change ALL the time…but previously being a branch manager for a mortgage brokerage – I knew that there were 2 issues to consider:

1) Most mortgage brokers don’t do loans under $50,000. Plain and simple…they just don’t do them, so they aren’t an option.

2) I knew first hand that we had issues with loan officers taking loans under a certain amount because, like this particular loan officer mentioned, we literally had to pay money out of our pocket (to the lender) to close the loan. We honestly didn’t have an issue if we were making $0…we wanted to be doing loans for as many people as we could, but what business person wants to make a practice of losing money on deals? If it were a $50 or $100 loss, that might be one thing, and I might eat the cost so we have happy clients who will potentially refer us or return to us one day…but sometimes these costs can run into the thousands…and at that point…probably best to know your limitations as a service provider.

So, I understood his mentality that loan officers should be willing to do anything and everything to earn business, but I hope my insight did give him some clarification that it probably wasn’t all about making a commission. Not all banks, brokerages, and credit unions are created equal (agents should know who does what best and what the advantages of working with each are)…and that loan officer’s hands might be tied for the scenario…but may be the best in the area for another type of loan.

It is important to work with a professional who understands common financing options and limitations before you get your heart set on that wonderful home…and preferably, before you ever start looking.

Please let me know if you need assistance buying a home this season – I’ll be happy to connect you with fantastic options for your home financing and make sure we have a plan that will work to successfully get you into your new home!

For help on your next real estate transaction in the Greater Seattle area, give me a call at (425) 483-1010 or visit http://www.RyanHalset.com

Ryan Halset
Real Estate Broker | Realtor ®
Boardwalk Real Estate, LLC
Phone: (206) 930-7959 | Email: Ryan@BoardwalkSeattle.com

Providing professional real estate services throughout Greater Seattle and the Eastside.

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