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A very recent national study shows that realtors prefer working with mortgage brokers over banks when referring a lender. Mortgage brokers were the preferred choice at 47%, banks came in at 31%, and non-bank lenders came in at 22% (non-bank lenders can also be classified as net-branches). When indicating their preference, realtors were asked to consider speed, responsiveness, cultural fit, and the breadth of products offered.

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You may be watching the national trends in real estate and mortgage rates on the news, but when it comes to real estate and mortgage lending, national doesn’t necessarily translate to local. In real estate, ALL markets are local. It is of course true that national trends have an impact on our local market, but in real estate, each market is truly unique.

Real estate is a local business. If you are a buyer or seller who is thinking about purchasing or listing a property, you really do want to speak to an agent or broker that specializes in the area or city that you live in.

Real estate can change dramatically between cities and regions so you need to work with a local broker so you are getting the latest “up to the minute” accurate information about your current real estate market.

It’s important to use a local real estate broker, and it is equally as important to use a local mortgage broker.

A local mortgage broker may find you a lender in another part of the country. An online bank might not have a local office where employees can help you one-on-one or answer area-specific questions.

Some out of town lenders don't understand the types of heating/cooling systems used in specific areas, they aren't familiar with private septic systems, and they don't immediately understand common classifications and terms used by local appraisers. Those are just a few examples of problems you can come across that may cause significant slow-downs in loans made by an out of town lender vs. working with a local mortgage broker.

Knowing that real estate is a localized sector that is reliant on local trends, and knowing that mortgage brokers are very important in the real estate transaction process… why would you choose to use a local real estate agent and an out of state broker?

Not only does utilizing local businesses help our local economy by keeping business in the state, but it’s also in your best interest to use locals who know the market and understand the local trends.

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A new national study just released shows that nearly 50% of homebuyers make the decision on which lender to finance their purchase, using their realtor’s recommendation.

So instead of shopping around for a lender, homebuyers are influenced by their agent to use the lender of the realtor’s choice-- for better or for worse. Realtors want speed and reliability from a lender and usually establish relationships with lenders who offer both. The downside to that might be that the lender does not offer the lowest rates or the best terms for the borrower.

Just blindly going with the referred bank or lender clearly isn’t wise, because when it comes down to it, you really won’t know how competitive they are, unless you shop your loan elsewhere. Often times when a buyer makes an offer on a home, the real estate agent will ask them to get pre-approved with the recommended “preferred lender.” While it may be in your best interest to get the pre-approval to show you’re very serious about buying the property, the buyer doesn’t need to use that lender to obtain your financing. You can still shop that mortgage around for the best rates and terms. Now, we are not in the slightest saying not to use the realtor’s preferred lender, just to be prudent and get other quotes.

Using a mortgage broker like indigo Mortgage can mean the difference of .25 to .5 % in the interest rate, which over the life of the mortgage, can save the borrower thousands of dollars. If it’s an FHA or VA loan, the borrower can also see a swing of several thousand dollars in lender-paid closing costs, again saving you money.

A mortgage broker has access to several different lenders so the buyers’ chance of getting the best rate and getting their loan closed is much greater. Remember, It’s actually best to start with a lender before even contacting a real estate agent or looking for homes because this way the borrower can be approved for a certain level of mortgage, and will have full knowledge of their loan before they make an offer.

For questions about selecting a mortgage lender, contact Indigo Mortgage in Albuquerque, NM at 505-836-5700. Indigo Mortgage offers five mortgage divisions including Residential, VA Loans, Reverse Mortgages, Construction, and Commercial. They are licensed by the Nationwide Mortgage Licensing System (NMLS #188348), and can provide loans anywhere in New Mexico.

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