5 Details Expert Realtors Should Understand About Mortgages
5 DETAILS EXPERT REALTORS SHOULD UNDERSTAND ABOUT MORTGAGES
August 21st, 2017
It’s important to know information about key details that expert realtors should be knowledgeable about when it comes to the mortgage industry. Next time you’re in a meeting with a client, remember these mortgage perks to help get your client the success they need.
Mortgage lenders are an exception when it comes to credit
As a Realtor, your clients may not want to reach out to different lenders because they fear multiple credit inquiries negatively impacting their credit score. In the “real world” that might in fact be an issue. In the mortgage industry, this won’t cause any harm to credit scores. Traditional credit rules do not apply to mortgage lenders. Referring them to the most trusted lenders and encouraging them to choose a trusted lender guarantees a smooth transaction.
The 20% down payment misconception
Many people purchasing a home do not necessarily need a 20% down payment. 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. In reality, the 20% down payment for clients allows them to pay private mortgage insurance(PMI) on their mortgage. PMI is special type of insurance policy who’s provided by private insurers, to protect a lender against loss if a borrower defaults.
Down payment assistance programs are out there
Customers who are looking to buy or rent may be unaware that buying a home is the same amount as they’d pay to rent for a home. Not only is a 20% down payment not required, but there are other options such as assistance programs, and grants.
Past clients may be ready to sell their homes and move into bigger and better homes, 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. From time to time, programs from different mortgage processes have changed and so have credit scores. Having clients pre-approve for a mortgage can save the realtor, loan officer, and client time.
Keep appraisals in mind
Once a client’s been approved for a mortgage, make sure you’re aware of which loan they have been approved for. This will help you when you’re writing up your purchase contract. Also, having a great relationship with realtors and clients is a big and important factor in the buying process. Having the latest information and trends is also important and will save you a lot of time when researching later on.