Ways To Reduce Your Client’s Mortgage Stress!

March 3, 2017

Seller Strategies

The past few years continue to bring a lot of mortgage changes to the real estate transaction.

A couple of examples are:

  • Low credit scores are costing buyers more
  • In most cases, 100% financing is GONE, except USDA
  • Appraisals are being more strictly scrutinized
  • Buyer’s credit is being re-verified right before closing

As listing and selling agents, you need to keep your clients informed about the many changes that are occurring in the marketplace.

As a buyer’s agent, you need to make sure that your buyer understands that their mortgage lender will often continue asking for additional documentation during the mortgage approval process. The lender’s underwriter is constantly being made aware of new guidelines that are happening sometimes daily.

Tell your buyer that this is very common in the mortgage industry and that what wasn’t a necessary document yesterday is a requirement today. Everyone is concerned about C.Y.A. The more information the buyer can provide at their initial mortgage appointment the better.

Also, tell your buyers to freeze their non-essential buying during the mortgage approval process. Inform them not lease a new vehicle, buy a large item and put on layaway, open or close any credit card accounts that the loan officer didn’t recommend doing. You don’t want their credit score to go down, debt ratios go higher or have their financial reserves reduced.

In some cases, because loans were not properly packaged, lenders are being required to buy them back. So let your buyers know that there can be last-minute conditions attached to their file before receiving a full approval. Don’t allow them to get upset. Just provide the requested documentation, so that their mortgage can be approved. Many consumers feel they are being singled out, but even those with the highest credit scores and cash reserves are having to jump through more hoops to get their mortgage approved.

As for listing agents, when you receive an offer on your listing, make sure that you get a pre-approval letter with the offer. You do want to find out if the pre-approval was reviewed by an underwriter or automated system and not just a loan officer.

Also understand that a lot of things may be happening behind the scenes to get the mortgage approved that you’re not privy to because of privacy laws.

The best thing you can do for your seller is to keep in touch with the buyer’s loan officer at least weekly. You should have an initial phone call stating that you know that the loan officer can’t share the buyer’s confidential information with you, but that you want to be kept in the loop, should any issues arise that the seller needs to be aware of. If the buyer isn’t going to get their approval, you want to know as soon as possible, so that you can see if anything can be done to remediate the situation or so that you can put the listing back on the market.

Many times people go through a lot of stress in a real estate transaction, because they are not kept up to date on what’s happening. The more you share with your clients about what is going on or what can or may happen, the less stress that will be felt by all.

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