We have more funding sources through our mortgage bank and wholesale channels than almost any other lender. We also have a large number of complex transactions with tough appraisals, income issues, HOA issues, quick close issues, etc.
We always connect borrowers to the best funding source relative to the borrower’s needs. Issues often arise when borrowers, with tough issues, demand the lowest rate on the market. We can provide the lowest rate, but there are often risks associated with locking a rate with the low-rate funding sources:
1. Appraisals: The “low rate” funding sources usually have the most conservative appraisers, or appraisal guidelines. In hot markets like Oakland/Berkeley, it is almost a certainty that appraisals will be an issue with some funding sources.
2. Service: The low rate funding sources are often backed up with too much business and rarely able to perform in a timely manner. They also often have more cumbersome requirements like “second signature” reviews.
3. Guidelines: The low rate sources have the tightest underwriting guidelines by far. They require lower debt ratios, more reserves, and better credit. They also require more conditions like paper-trailing deposits, extensive HOA reviews, letters of explanation, etc.
We don’t begrudge borrowers for shopping for the best rate, as it is only rational. Our only point here is that insisting on the absolute lowest rate often makes it difficult to close on time or close at all, when transactions involve tough issues.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646