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The Loan Store’s ‘Buy Before You Sell’ leverages home equity toward a purchase


Brandon Stein, president of The Loan Store, described the product as a “contingency buster,” giving brokers a tool to aggressively pursue the purchase market by leveraging a home’s equity. “We are unlocking the equity through this “Buy Before You Sell” program so [clients] can essentially have a zero-interest line of credit to leverage that equity as a down payment on a new home without having to sell their current home as a term of purchasing the new one,” Stein told MPA during a telephone interview.

“Our partners are brokers and non-delegated lenders who can educate themselves on this product so they can do the same with their borrowers,” he added. “It’s another tool in their toolbelts, so to speak, to remain aggressive and stay in front of borrowers and the purchase market.”

The upshot: “They [brokers] are offering them a unique way for financing a new home purchase which again is leveraging the equity in the current home to be able to go out and have an aggressive offer to purchase the new home they’re looking to buy.”

The “Buy Before You Buy” offering is the latest initiatives from a notable lender amid the start of the homebuying season. Earlier this month, United Wholesale Mortgage unveiled its “Conventional 1% Down” offering, which gives certain borrowers up to $4,000 towards purchasing a home. The program is being offered to a specific demographic – borrowers with an income at or below 50% of the Area Median Income and a 97% LTV.

Product helps originators strengthen their relationships

Stein provided scenarios under which the program could potentially strengthen loan originators’ relationships with real estate agents with the spring buying season looming: “Having this tool in their toolbelts, they can work directly with real estate agents,” he said. “They can train their real estate agents, so they understand how this product works. From a real estate agent’s perspective, they may have buyers already teed up who are currently in the market, maybe have made offers on home and been denied because of this sales contingency of their current home.”

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