Solving the Denver Home Loan Quagmire Dilemma

Traditionally, homebuyers rely on banks or savings & loan institutions for home loans, otherwise known as mortgages. These entities for decades have been the primary market players in the home loan business.

Traditional Lending Doesn’t Work Well Anymore

However, starting in the 2000s with hyperactive real estate markets, buyers have found the traditional path to be very frustrating, cumbersome and bureaucratic, none of which works well with a homebuying market that moves fast and expects buyers to move faster. As a result, hundreds of buyers every week have been blocked out of potential purchases because of difficulties with traditional loan application processes.

Additionally, added regulation and scrutiny have increased the number of layers or review since 2008, in response to the extreme real estate speculation based on mortgages that probably shouldn’t have been made, resulting in thousands of foreclosures through 2009 and following years. So, as a result, a homebuyer in 2024 faces an uphill climb trying to get into a home, especially with a limited supply that Denver has been seeing over the last year.

Trying a Different Approach

A big problem buyers have with only using the direct bank approach tends to be a limited market. This choice really limits a Denver buyer to just the banks and lenders in Denver itself, which make up a handful of possibilities at best. With a mortgage broker, alternatively, a homebuyer has much wider access to lenders across Colorado who collectively provide far more competition and comparison of rates, benefits, costs and options. They also increase the variance of loan approval criteria as well, making it far more possible for a buyer to find a willing lender for their particular circumstances.

A Few Caveats Regarding a Broker Approach

Unlike direct lenders, who actually can provide the financing themselves for a mortgage, a broker has no ability to actually create a loan. Instead, their function is to find and provide the best financing connection between a prospective borrower in Denver and lenders who can and are willing to serve that market. 

Again, the key advantage of a broker is wider market access. Because the broker works as a professional in the lending industry, they have the ability to reach and connect with far more lenders than a typical consumer. Additionally, the broker does a significant amount of vetting of an applicant’s package so that what is presented is the most viable, prepared package. Lenders appreciate this because they know brokers help fix issues that would otherwise make a borrower a poor candidate for financing.

Follow the Advice

If, as a buyer, a prospective buyer is told by a broker to make changes to improve their situation by paying down debt, generating more income, or saving more for a down payment, these guidance points are provided knowing what is needed to make that applicant viable for a loan on the wider market. It is essentially the broker telling a buyer what needs to be fixed directly for the best borrowing chance.

That kind of advice is incredibly valuable in terms of the shortest window towards getting approved. And, given how tight the Denver market will be in 2024, it makes sense to work with a broker now more than ever.