5 simple details expert realtors should know about mortgages
Don’t worry, we’re not trying to turn you into a loan officer here, but we do want to share some important details that expert realtors should be knowledgeable about when it comes to the mortgage lender side of things. Keep the following 5 mortgage things in mind the next time you’re meeting with a client.
1. Mortgage lenders are an exception when it comes to credit
Your clients may not want to reach out to different lenders because they fear multiple credit inquires negatively impacting their credit score. This may be something to worry about in the “regular world”, but in the “mortgage world” – multiple credit inquiries with lenders won’t cause any damage to your client’s credit score. Traditional credit rules don’t apply to mortgage lenders. So let your clients know shopping that around for the best mortgage rate isn’t something they need to worry about. Refer them to your most trusted lenders and encourage them to choose a lender who provides the best option for their individual needs.
2. The 20% down payment misconception
Most people aren’t aware that they don’t necessarily need a 20% down payment to purchase a new home. In fact, mortgages such as FHA loans could require as little as 3.5% for a down payment, or as little as 5% for conventional loans. What a 20% down payment means for your clients is they avoid having to pay private mortgage insurance (PMI) on their mortgage, but for many Americans, this size of a down payment is out of reach. Recommend that your clients ask their Personal Loan Consultant about mortgage options available for home buyers who have less than a 20% down payment.
3. Down payment assistance programs are out there
Many first time home buyers may not understand that they could own a home for as much as they pay in rent. Not only is a 20% down payment not required – there are multiple down payment assistance programs, grants, and other mortgage programs available to help your clients come up with money for their down payments. Assistance varies on factors such as county, city, and state, so depending on where your clients are located; it’d be beneficial to educate yourself on all the resources available so that you can get them into their new home!
4. Pre-approvals matter
Clients that you’ve worked with for years may be ready to sell their homes and move into bigger and better things, but even if you think they’re the best models of ‘move-up buyers’ you’ve ever seen, it’s still in your best interest to make sure they’re pre-approved. Take into consideration all of the things that may have changed since your clients took out their last mortgage: underwriting rules and restrictions, their credit scores, income, and if they originally qualified for a loan through a specific program, that program may have changed as well. Making sure your clients are pre-approved for a mortgage saves you and your client time.
5. Keep appraisals in mind
Once your client has been approved for a mortgage, make sure you keep in mind which loan they have been approved for. This will help you when you’re writing up your purchase contract. Appraisal ordering guidelines are different for VA, FHA, and Conventional loans, and they’re constantly changing to protect consumers since the mortgage crisis in 2008. You’ll want to make sure you’re caught up on the latest information. Not only will it save you time – it’ll save you a headache.
At New America Financial we want to ensure that our realtor partners are informed and ‘in the loop’ when it comes to the mortgage business. If you have a mortgage question, you can count on us to be a resource. Just get in touch!