With so many online mortgage brokerages, the question arises, “Does it matter where a mortgage lender is located?” This is a far more important question than many brokers realize.

You may ask, “What difference does it make? A lender is a lender, right?”

Here are just some of the difficulties you may face when dealing with an out-of-province lender.

Lack of Comfort with Appraisal Values: With so many appraisal frauds being reported, a lender who isn’t local may be concerned that the appraisal isn’t an honest reflection of the property’s value.

Lack of Comfort with Plumbing Systems: A lender from an urban/suburban area might have questions about the appraisal of a home that has a private septic system because the lender is only familiar with the appraised values of homes on public sewer systems. This can delay or even prevent a loan from going through.

Lack of Familiarity with Different Heating and Cooling Systems: Heat pumps work in southern and coastal British Columbia because the winter temperatures are much milder in these areas as compared to interior Canada. A lender from one of the interior provinces might be reticent to finance a home with this type of heating because it’s not a heating system that works in the lender’s province. This would rarely be a problem with an American lender as only those areas of the U.S. which border Canada are too cold to support heat pumps.

Any less familiar heating system within a region could lead to loan delaying questions.

Lack of Familiarity with Rural vs. City Water Systems: A property’s water may be supplied by a spring or well. The lender may have concerns about the dependability of such systems if city water supplies are more familiar.

These are just some potential areas around which questions may arise. Lenders tend to be cautious. Even if the loan eventually goes through, the delays won’t be appreciated by your client(s).

Here are some of the advantages you may have when working with local lenders.

Local lenders, especially private lenders, are much more likely to be ready to move on a mortgage right away. Both private investors and banks are more likely to have the local knowledge of the real estate market needed. These investors know when an investment is risky and when it is the norm for a given area.

This makes a mortgage broker’s job much easier. Two things are important for a mortgage broker-the ability to secure the best rates possible for clients and the ability to move the mortgage application process through quickly.

Not all lenders are created equal. Each one has a unique set of criteria for qualifying a borrower. You may not be able to find a local lender that will give a mortgage to your client. Then looking for out-of-province lending sources will be necessary. Yet as often as possible, when local options are available, you will find that it does make a difference working with someone who understands the local real estate market.

Nadir Zulqernain has been a mortgage broker and salesman for over 30 years. He trains mortgage brokers for success at GMC Global, a British Columbia Mortgage Brokerage firm. You may learn more about a career as a mortgage broker, by visiting http://www.mortgagebrokerjobsinbc.com/blog/.

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Tags: Advantages, Lenders, Local, Working

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