After being in the mortgage business for 15 1/2 years, to many loan officers don't ask the appropriate questions in the first 10 to 15 minutes of interviewing the consumer. The main concern that the consumer has and usually asks first is what the lender's rate is. And because so many loan officers don't want to lose this consumer, they will give them a low rate without asking these basic questions.
What should be asked by the loan officer?
BASIC OUTLINE :
- Mr. or Mrs. Borrower, what kind of payment are you comfortable with? Many loan officers pre-qualify the consumer on the highest loan amount/purchase price that they can obtain. The loan officer should focus and get the consumer to focus on the payment. Making sure that this is a reality and not a fantasy, when it comes to the payment and the type of home.
- Goals - The loan officer should take that extra time in the beginning of the interview to go over that consumers goals, and not worry about the rate and fees at first. Just giving a consumer what they want to hear, trying to sound the cheapest, isn't always the best solution for that specific consumer. What is also lost in the best rate and lowest fees is the word 'service'. You want a mortgage professional that will be there for you in the beginning, the middle, and the end. Also a mortgage professional that will be able to give you options and explain these in detail. So many lenders don't have all the programs, such as FHA mortgages, which may be your best option. But without being given that option, that lender might just give your their best program, which is not necessarily the best for you. With the conventional mortgages becoming more expensive in recent months, even someone with a 670 credit score and less than 20% down would be better with a FHA mortgage.
- No questions are a bad question. During your mortgage process,never hesitate to ask your loan officer any questions. Even more importantly, if you ever have any questions after settlement or ever find yourself in a financial difficulty with your mortgage payments, get a hold of your loan officer or lender as soon as possible. Don't wait a month or so later, when it could be to late then.
Overall, if you aren't in a position to put more than 20% down and you have a credit score less than 680, ask your lender about FHA mortgages. In this particular post, FHA mortgages vs Conventional mortgages.... which is better?, you can see an example with real numbers that gives you a good idea what I am talking about. If a lender tells you differently, it just might be because they aren't FHA approved.
______________________________________________________________________________________________________________________________________________
For more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!
Copyright © 2008 by Jeff Belonger
I love that you aknowledge the comfort level of the Buyer... too often we hear stories about Buyers qualified out of their comfort zone and agents only showing the top $$ properties. A happy Buyer is a client for life ~ for both mortgage brokers and agents.
Jamie Friedman, Hawaii Real Estate
Hey now! I'm so glad you were able to get this submitted to the Writing Challenge, but more important, that you were successful in keeping those adorable little cuties in their chairs the entire time :) And you know, I'm betting most of us who have your ethical standards agree that keeping the payments comfortable for our clients is number one. I just came from a showing where I discouraged an enamoured client from making an offer that was at the top of his limit. I just know he will find another property he will like equally well without pushing that limit.
So, I think you should have kept the cute Einstein wig on throughout the entire production :))
JAMIE...... I think so many of us miss this part of it... forget the part about the client being comfortable with their payment. I'll be honest, I know I have probably have forgotten to ask this once in a blue moon. But for the most part, it's one of the first questions that I usually ask. As you mentioned, the clients comfort zone, which would be reality, not fantasy.
JENNIFER..... lol.... well, after a long day at the Franklin Institute... being tired and restless at the same time, it wasn't easy. I think I would have eaten into my production profit margins if I would have had any more takes on this... lol And I was semi distracted when I was doing my side of things, because those two were ad libbing, pretending on taking notes while I was talking... and I lost a part of what I wanted to touch upon... lol But yes, they were good kids and helped me out. So... you wanted me to keep the wig on the whole time? hhhmmm
LISA..... it's not only that they aren't licensed to do FHA... even those that are, don't know the whole ins and outs of how to manage a consumer through the whole process. On a semi hard deal, you really need to know what you are doing and what you are looking for. Thanks for the compliment.
Jeff,
I love it!
But, didn't that boy make a mistake? Shouldn't he have said: Uncle FHA Expert?
Quite kids!
Bill
Dear Jeff,
Just happened to have some extra time today to sign back onto Active Rain! You always ask me to come around and visit your blogs and I'm glad I did tonight. Nice video! The kids are growing.
I have to admit the Einstein character was a hit. I'm thinking Grammy's.
Excellent blog my friend.
- Mortgage Man
Sir WILLIAM..... thanks, much appreciative. In regards to the Uncle part... if my other nephew and niece were part of this, I was actually going to have my 4 yr old niece say.... "what a great uncle" and then have my other nephew jump in and say, "no, that's the FHA Expert"... lol But they were both tired from today's activities.
DAVE.... not sure about that, because I am my own worst critic. I think this could have been much better, in what I wanted to say. But I was distracted by the kids... lol But I guess it's hard to be serious when you are 9 yrs old. Besides, as I mentioned, it was a long day today, for all involved.
JASON..... be back? What ya bringing me? A half beer? lol Seriously, I am okay with the outcome. I was rushed in doing it and didn't plan the script very well. And not that I can blame my niece and nephew, but they had me frustrated because they were goofing off a tad when the camera wasn't on them and I couldn't focus on what I wanted to say. And I only wanted one take, since their time was limited... lol But thanks.
NIMA.... thanks.... Grammy's? lol Well, just a gold star would do. Seriously, thanks, but this could have been better in my mind. But I guess it was simple enough for the consumer. Hey, we need to catch up some sometime. thanks again.... and yes, the kids are growing up...
Jeff ~ Nice work, my friend. And points I completely agree with! I hope you are doing well. It certainly appears as though you are...
SARAH....... thanks for the compliments. And yes, things are going well, just trying to keep up, because I have had a few deals drop in my lap last minute, from other lenders denying the client last minute. Hope all is well with you also...
RANDY....... I see so many that just qualify the consumer to the max purchase price. Do you know how many consumers that I have spoken to in the last 6 months that told me a lender approved them for such and such purchase price. And then I go back and go over the numbers with them again and they tell me that payment is way too high.... LOL Oh, wait... the loan officer qualified you, but never went over the payment with you? How ironic is that. thanks for the compliment.
Jeff,
I noticed Mr. Borrower was getting a little antsy, waiting for his turn to speak his lines!!! Nice post Jeff!!! :) Thanks, Fran
THANKS FOR THE GREAT INFORMATION AND THE GREAT VIDEO, I REALLY ENJOYED IT.
WORKING WITH A FRIST TIME HOME BUYER RIGHT NOW.
FRAN..... lol... antsy? He is usually boisterous when not under the spotlight. His sister took over... he could have done better... but hey, it was last minute and a quick take. They did fine. thanks
MARK..... long term needs are usually over-looked and not talked about. We need to act like a financial planner also. But one needs to understand all options and to give them in a manner to the consumer that is easily understood. And yes, I hope other agents, loan officers, and consumer take notice.
CAROLE..... thanks.. glad you enjoyed it. Just trying to keep it simple and basic. I think so many loan officers make it more complicated than it really is.
The DANIEL HAYES TEAM...... thanks, I am glad you did... I am going to start doing more of these. Almost like mortgages for dummies. But it should be titled, don't listen to your loan officer that doesn't ask you the right questions.
LARRY...... Simple? lol They were nice enough to help me out, but were driving my patience when filming this per se. But thanks for the polite compliments in regards to my niece and nephew.
JASON..... thanks... thanks for the compliments.
PATRICIA..... thanks... I think it's s simple and easy approach that so many loan officers skip over. Mainly because they want a sale and sometimes a higher commission. We need to focus on the important issue, the payment.
TOM...... yes, most want to know that, but their focus should be on the payment. As I mentioned, I have talked to several that were qualified by a previous lender up to a certain price, but didn't know what that payment would be until they had spoken to me. Their next answer was.... "wow, that's too much of a payment."
So, I blame that partially on the consumer for not asking, but I also blame it on the loan officer for not divulging that information. The loan officer should know better no matter if the consumer asks or not. But if they don't tell, they don't lose the client.
VIRGINIA..... I think it's because I use Firefox when I write my blogs..... I am sure you are using IE?
GITA...... I truly think FHA, if the lender has the ability to do them and knows how to use them, that they should be about 80% of all business, because of how conventional loans are priced higher now. Just my opinion and my .02, that some still disagree on. But when I do these charts, the proof is within the chart.
MARGARET..... the sad thing is that it should have never left, not unless the value of the home way exceed the FHA limit, which is not the case now. In regards to the formula, for the most case, it's pretty much standard. You can basically get away with 2.25% as your down payment. That formula was there most times for the lower loan amounts. That's not the case anymore....in most cases.
Jeff - Your niece and nephew appear to have been very polite and helpful during your "production". Nice kids. I would like to see a wide variety of characters next time around, perhaps 5-10 different wigs and looks for you. :-)
Jeff, thats great. A suggestion for your next one:
Include some caption with your contact info!
If you do that I'll think seriously about embedding your video in my website!
Paul
JASON..... yes, they were... just good kids trying to help out their Uncle. But next time, a wide range of characters? lol Maybe, we'll see.
DESIREE..... thanks for both sets of compliments. I thought, gee, if Dez can do it, so can I.... lol
PAUL.... thank you much for the polite compliment and for the offer. I'll work on this some and see what I can do. Hopefully we'll be able to catch up some.
CHADD.... thank you very much for that polite compliment.