For a lot of new buyers, understanding the mortgage process can be one of the most challenging steps of buying a home. As an agent, it is your job to support your client through every step in the buying process. Although your client will also be working with a lender to complete the deal, you can help to prepare your client so that the mortgage process goes as quickly and smoothly as possible.
Here are some tips to help your client through the mortgage process:
Shop for a Lender
As an agent, you have worked with multiple lenders in the real estate business. Maybe you have a lender that you have worked with more than others, but it is important to find the best lender for your client’s financial situation because no two lender fees are alike. Maybe your client doesn’t know anything about mortgages. In that case, perhaps recommend someone who is very patient and can explain everything in layman's terms.
Getting pre-approved will help determine how much your client is qualified to borrow. This is important for you to know because it will help you set a more realistic value of what your client can afford and allow you to start preparing a list of homes that would fall into your client’s price range.
Debt and Credit Score
Advise your client to pay down their debt. The lower their debt is, the lower their credit score will be which is an important factor in determining how much money your clients are able to borrow. Your client’s credit score should be a minimum of 680, but preferably 720 or higher. The higher the score, the lower the interest rate on your client’s mortgage.
Advise your client not to make any large purchases or apply for new credit cards. All last minute spending is going to be flagged so when your client’s lender checks their credit reports, they will see those transactions.
Your client should put down as large of a down payment as possible. This will help to make the loan-to-value smaller which will improve your client’s chance of being approved.
Provide your client with a list of items that they will need to show the lender. They will want to have their pay stubs, bank statements, assets, credit documents, tax returns, and any other financial statements available. Having this information ready will speed up the process.
Mortgage loans may not be your specialty, but knowing the basics and being able to assist your clients will help put your client at ease through a stressful time. Help your clients every step of the way by being patient and providing them with knowledge that can ensure success.
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