Friday, July 23, 2010

Can All Lenders Sell Purchase Loans AND Refinance Loans?

Can all lenders sell purchase loans AND refinance loans?

That's a common question and the answer is YES. Unless a lender only deals in a very small niche (fix and flip loans, hard money loans, etc.) they can sell loans for both purchase and refinance transactions.

The underwriting guidelines are different for refinances (generally a little stricter than they are for purchases), but there is nothing preventing a mortgage originator from selling either type of loan.

Most originators market themselves towards one market (either purchase or refinance) depending on their sales skills and preference for dealing with one market over the other. If an originator likes working with real estate agents, then they will probably be more inclined to concentrate on purchase transactions. If they prefer to work more independently, or prefer not to be tied down by contract deadlines, then they will usually concentrate on refinance transactions.

The majority of our loans are purchase transactions, but we still sell refinance loans as well. Even though the number of purchases across the country is low compared to the number of refinances, marketing ourselves to real estate agents has proven to be very effective. As more and more loan originators drop out of the industry, the number of agent referrals we get steadily increases. So far, things have worked out pretty well.

We would like to remind everyone that we do sell refi loans and always love more business, so pass the word to your clients and friends that The Mortgage Experts can get them those super low rates that everyone should have right now.

Since refinance business is just extra business for us (we spend $0.00 marketing ourselves as refi lenders), we pass that low overhead onto our refi clients. We always sell refi loans at the par interest rate (the lowest rate that does not require the borrower to pay points). That means we almost always have lower interest rates than anyone else.

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