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Phil Shelton
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becoming mortgage broker to fund own residential mortgage loans

Phil Shelton
Posted Jul 17 2023, 09:58

is it legal to become a  mortgage broker to fund my own investment residential deals? I do not want to pay broker fees. Looking to save money especially with Hard money lenders. 

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Erik Estrada
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Erik Estrada
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Replied Jul 17 2023, 10:35
Quote from @Phil Shelton:

is it legal to become a  mortgage broker to fund my own investment residential deals? I do not want to pay broker fees. Looking to save money especially with Hard money lenders. 


 Why not just go direct or build a relationship with a few lenders? 

There's no advantage to getting a brokers license to fund your own deals. Hard Money lenders can go cheap if you give them a lot of business/maintain a relationship with them. 

They key is volume. If you give a lender a lot of business, They will reward you with better fees, better rates. If you are only doing a couple of deals, there's no incentive for a lender to go down on the points/rate. 

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Wayne Brooks#1 Foreclosures Contributor
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Wayne Brooks#1 Foreclosures Contributor
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Replied Jul 17 2023, 11:47

@Phil Shelton I don't know why you think you'll save money with a HML….they Are the broker (using other people's money) generally.

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Phil Shelton
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Phil Shelton
Replied Jul 17 2023, 12:14
Quote from @Wayne Brooks:

@Phil Shelton I don't know why you think you'll save money with a HML….they Are the broker (using other people's money) generally.


even if i use a mortgage broker? isnt the broker making money on top of what the HML charges?

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Erik Estrada
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Erik Estrada
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Replied Jul 17 2023, 12:45
Quote from @Phil Shelton:
Quote from @Wayne Brooks:

@Phil Shelton I don't know why you think you'll save money with a HML….they Are the broker (using other people's money) generally.


even if i use a mortgage broker? isnt the broker making money on top of what the HML charges?


 Yes a regular mortgage broker charges points on top of what the hard money lender charges. 

If you want direct private funds, you need to be able to work with hedge funds, attorneys, or people with a lot of cash. 

Most hard money lenders act as the intermediary between the actual source of the funds. They have an attorney to draw loan docs, have their own underwriters,  and do everything a traditional lender would normally take care of. 

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Mohammed Rahman
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Mohammed Rahman
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Replied Jul 17 2023, 14:07

@Phil Shelton - I would compare it to an agent representing themselves when buying their house to save on the commission. 

You getting your mortgage lender license doesn't mean you suddenly have access to unlimited capital btw. 

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Wayne Brooks#1 Foreclosures Contributor
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Wayne Brooks#1 Foreclosures Contributor
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Replied Jul 17 2023, 14:14
Quote from @Phil Shelton:
Quote from @Wayne Brooks:

@Phil Shelton I don't know why you think you'll save money with a HML….they Are the broker (using other people's money) generally.


even if i use a mortgage broker? isnt the broker making money on top of what the HML charges?

I wasn’t referring to “using a mtg broker to find a HML”, I was talking about using the HML directly. HML’s are so prevalent, I don’t people use a mtg broker to find them. Besides, to avoid a “mortgage broker’s commission” you’ll have to find the HML directly anyway.

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Phil Shelton
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Phil Shelton
Replied Jul 17 2023, 16:25
Quote from @Mohammed Rahman:

@Phil Shelton - I would compare it to an agent representing themselves when buying their house to save on the commission. 

You getting your mortgage lender license doesn't mean you suddenly have access to unlimited capital btw. 


 yes i have my RE license and have done this.. 

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Dennis Muno
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Dennis Muno
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Replied Jul 17 2023, 21:58
Quote from @Phil Shelton:

is it legal to become a  mortgage broker to fund my own investment residential deals? I do not want to pay broker fees. Looking to save money especially with Hard money lenders. 


 I doubt you can fund your own loans. As a mortgage broker, you do not fund loans. You will work with multiple lenders, obtain application, complete application, structure loans and then broker the loan to a lender whose pricing is good, whose loan guidelines your client qualifies for, and  who can/has a good reputation for closing.

Also, in the broker world you normally can't do your own deals and also pull your credit. This is a conflict of interest and depending on the mortgage brokerage, could get you fired. 

As a broker you never fund loans yourself, you broker loans

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Phil Shelton
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Phil Shelton
Replied Dec 16 2023, 15:43
Quote from @Dennis Muno:
Quote from @Phil Shelton:

is it legal to become a  mortgage broker to fund my own investment residential deals? I do not want to pay broker fees. Looking to save money especially with Hard money lenders. 


 I doubt you can fund your own loans. As a mortgage broker, you do not fund loans. You will work with multiple lenders, obtain application, complete application, structure loans and then broker the loan to a lender whose pricing is good, whose loan guidelines your client qualifies for, and  who can/has a good reputation for closing.

Also, in the broker world you normally can't do your own deals and also pull your credit. This is a conflict of interest and depending on the mortgage brokerage, could get you fired. 

As a broker you never fund loans yourself, you broker loans


 if i have a license wouldnt it be easier for me to speak with lenders and cut out the middle man? 

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Jay Hurst
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Jay Hurst
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Replied Dec 19 2023, 13:01
Quote from @Phil Shelton:
Quote from @Dennis Muno:
Quote from @Phil Shelton:

is it legal to become a  mortgage broker to fund my own investment residential deals? I do not want to pay broker fees. Looking to save money especially with Hard money lenders. 


 I doubt you can fund your own loans. As a mortgage broker, you do not fund loans. You will work with multiple lenders, obtain application, complete application, structure loans and then broker the loan to a lender whose pricing is good, whose loan guidelines your client qualifies for, and  who can/has a good reputation for closing.

Also, in the broker world you normally can't do your own deals and also pull your credit. This is a conflict of interest and depending on the mortgage brokerage, could get you fired. 

As a broker you never fund loans yourself, you broker loans


 if i have a license wouldnt it be easier for me to speak with lenders and cut out the middle man? 

You have to set up relationships with wholesale lenders, and to set up relationships with net worth requirements,  proper systems and controls in place as well as experience. 

You can get your licenses and got to work for a broker or banker who has all the above but they are not going to go to the expense and trouble of bringing you on if you are only going to do your personal deals.  And the investors the broker or banker would be sending the loans to would not allow you to be the loan officer on your own deals anyway. If you are a real producer then the house typically will allow another LO in the office to be your LO and do the deal at a reduced margin but again, that is if you are bringing in profit from other loans. 
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Dallas Sauer
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Dallas Sauer
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Replied Dec 19 2023, 16:16
Quote from @Phil Shelton:
Quote from @Wayne Brooks:

@Phil Shelton I don't know why you think you'll save money with a HML….they Are the broker (using other people's money) generally.


even if i use a mortgage broker? isnt the broker making money on top of what the HML charges?


 Sounds more like you need a direct lender and not a broker relationship. Direct lenders will still charge you fees. You will just not have the broker fee on top.

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Phil Shelton
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Phil Shelton
Replied Dec 19 2023, 16:23
Quote from @Dallas Sauer:
Quote from @Phil Shelton:
Quote from @Wayne Brooks:

@Phil Shelton I don't know why you think you'll save money with a HML….they Are the broker (using other people's money) generally.


even if i use a mortgage broker? isnt the broker making money on top of what the HML charges?


 Sounds more like you need a direct lender and not a broker relationship. Direct lenders will still charge you fees. You will just not have the broker fee on top.


 correct, i have been using a broker and they charge more fees/money on top.

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