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.
Disadvantages of in-house lenders
Whether in-house lenders actually process a loan faster is debatable.