The ability of your client to get financing on a mortgage loan quickly can often make the difference between a great bargain for your client or rather keys to a money pit. What your client tells your mortgage broker upfront can make that big of a difference.
The greatest challenge to working with clients, regarding mortgage applications, is that they often don’t provide enough information when applying for a loan.
Sometimes clients are not fully upfront with all they own. Either they forget, or they don’t admit everything up-front for one reasons or another, and later you discover at the last minute that they own another property and that a line of credit is already secured against that property. In reality, that is like a mortgage, so they need to disclose that to the lender.
Not disclosing those things upfront will only extend the amount of time it will take to get a mortgage. Learning of additional properties late in game could force you to re-write your clients’ application. You probably will have to fix things and re-work the application, so that everything still fits, when everything is fully disclosed.
In extreme cases, it can be especially problematic for buyers who already have more than four properties in their portfolio already, when finding a lender for that fifth mortgage can be that much more difficult.
The bigger investment clients who have more than 4 properties already will find it hard to fit with a bank because most of the banks, and even also some monolines, have a 4-door policy.
In summary, it is best to explain to your clients that it is very important to disclose all holdings upfront. Not doing so can really throw the whole deal for a loop, or worse, break the deal after all the dust settles.
