Homebuyers work closely with both a mortgage lender and a real estate agent to make sure they find the right house and get the proper financing. Realtors often develop relationships with lenders so they can recommend a professional who they trust to provide excellent financial service to their customers. Some real estate companies go a step further and develop an in-house lending program or an affiliation with a mortgage lender in order to generate more revenue and have greater control over the financing process.
There are both advantages and disadvantages to working with an in-house lender, so homebuyers should always compare offers from multiple lenders before committing to a lender or a loan.
Advantages of in-house lenders
Steve Adamo, president of Weichert Financial Services in Morris Plains, N.J., a division of Weichert Realtors, says that consumers prefer one-stop shopping for a home and a loan.
"We put local lenders in our real estate offices so they can have face-to-face meetings with buyers," says Adamo. "The big advantage to buyers is that the lender and the buyer and the Realtor are in constant, coordinated communication."Adamo says that an in-house lender can give borrowers a clear road map to prepare them before they make an offer on a house and can consult with them throughout the buying process. Suzanne Schakett, senior vice president of strategic alliances at Envoy Mortgage, a private lender in Houston, says that in-house lenders often have a formalized communication process to keep the buyer and Realtor informed on a daily or weekly basis regarding the status of the loan application. While all lenders are focused on getting a loan to settlement, the additional pressure of their relationship with the real estate brokerage can help move the transaction forward more quickly.