Breaking the Stigma: 3 HOA Loan Broker Myths Debunked
Three myths: that a broker costs the association more, that a broker's value is only their network, and that brokers leave boards in the dark. A broker paid at closing is paid out of the transaction rather than by the association up front. The test is not whether a broker is used but whose interests their pay follows.
The term “loan broker” can sometimes feel…slimy. We know, we hear it, too. Lending institutions have done a great job spinning the narrative that engaging with a loan broker is expensive, limits your loan options, and leaves loan seekers in the dark.
What if we told you that’s not true?
Not across the board, at least. There are always a few bad apples out there, but loan brokerage doesn’t have to be the dismal experience big banking tries to frame it as. Here are the three most common myths we hear about HOA loan brokerage, debunked:
Loan brokers are expensive
Mostly false. All service providers charge a fee of some kind. For HOA loan brokers, that cost is a percentage of the size of the loan and is rolled into the loan itself. So while the loan provider pays your broker their fee in one sum, your association effectively pays the broker’s cost over the length of the HOA loan. That means your community pays nothing out of pocket and the cost is spread out over the entirety of the loan..
At HOA Loan Services, our percentage fee is only charged one time and only upon a successful loan closure. It won't cost the association anything to see what we have to offer.
Loan brokers are only as good as their network
Half truth. This is a pretty fair point to make. Loan brokers handle the search-and-find component of loan acquisition, so having an extensive and reliable network of loan providers at their disposal is critical in providing the best level of services. But that network isn’t the only thing you’re getting when choosing to partner with a loan broker. Expertise and industry knowledge are just as important as the chosen loan provider, so a knowledgeable HOA loan broker can make a huge difference in your overall loan acquisition experience.
HOA Loan Services is incredibly proud of not only the 300+ loans we have placed since 2016, but also the extensive network of HOA loan providers we have built up in that time and continue to partner with to ensure our clients receive the best possible loan for their community’s needs.
Loan brokers communicate poorly
Mostly false. Loan acquisition is a complicated process. Having an expert on your side to walk you through the steps and explain each one to you is a serious benefit and makes the process less daunting.
That said, traditional loan brokers might not have the tools an HOA needs to find the best HOA loan. They may communicate well but not know the best jargon or phrases to use when speaking with the board or when communicating needs to a lending institution. So choosing an HOA-specific loan broker like HOA Loan Services is a great way to ensure quality communication about your loan acquisition process.
Bonus: My association doesn’t need a loan broker
There’s no right answer here. We’re not going to lie and tell you that every single HOA needs a loan broker–they don’t. And that choice is something only the board and community can make together. But we can tell you that working with the right HOA loan broker can simplify a difficult process and give communities a chance at the best loan options available to them with minimal complication.
If your community is considering an HOA loan for funding needs, contact us today for your free HOA loan consultation.
Boards also ask
What does your service cost?
Nothing up front. No retainers, hourly charges, or cancellation fees. Our fee is paid at closing, and only if we close your loan, so our outcome is tied to yours.
Which lenders do you work with?
We maintain relationships with multiple lenders who specialize in association financing, which lets us shop your project and bring back competing proposals. Working with one bank gives you one offer; this gives you a market.
Why do we need an advisor?
Experience matters. We know the lenders, the market, and how to structure and close a loan successfully. We validate the plan your board already has and often save associations money by securing better terms than a single bank would offer.
Tell us about your project.
We will tell you what’s realistic. No upfront cost, no obligation.