7 Smart Tips for Brokers and Realtors when Taking out a Mortgage
Securing the best mortgage loan is your top priority. These 7 tips can help ensure that your client is 100% satisfied.It’s in your interest to follow these steps and make sure the process is as easy, profitable and smart as possible!
Do the Research
As you know, there are hundreds of different types of mortgages and the rules are always changing. Read the trade papers nightly and the business section each morning. Befriend your local bankers and talk shop. Tactfully discuss lenders and loans with other brokers and real estate professionals. You might be surprised at how willing these professionals are to share helpful information—provided, of course, it’s not confidential.
In addition to keeping your ear to the tracks, it’s a good idea to keep reading up. Interest rates are changing and both state and federal law seem to always come out with new takes on their complex policies toward real estate and mortgage. Therefore, staying informed is the smart way to do your job.
Know What the Clients Want
The best way to help your clients get the proper mortgage is to know what their plans are. Are they buying a family home or a rental property? Do they plan to grow old in this home or to flip it in a few years? A mortgage with a low interest rate and a 30-year term may be appropriate for the next set of grandparents in the neighborhood, but not for the young entrepreneur. A smart lender knows the best loan for every situation.
Know Your Clients
Helping your client to buy within his means may not seem like Get Rich Quick Real Estate advice; and it’s not. Helping your client to find a property that he can afford is practical and smart. Having a client back out on a deal, declare bankruptcy or leave town because they are in over their heads is one of the worse thing that can happen to a Real Estate Agent or mortgage broker. The last thing you want is to spend your days in court instead of out in the market.
Knowing your client’s current financial situation, credit history, wants and needs is crucial to finding their mortgage. Finding a property and mortgage that your client can afford means a better, smarter deal for everyone involved.
Be Prepared
Have all of the necessary documentation before going to the lender. Even for a so-called “No Documentation” loan you will find that seemingly endless paperwork is needed. Beyond your client’s credit report you may need proof of income, explanation of debts and tax returns. Obtaining all of these papers can be time consuming unduly stressful, especially at the last minute. Work smart and plan ahead, you will save yourself time, money and a big headache.
Make Sure Your Client Understands the Mortgage.
A mortgage is a loan that must be paid back. As basic as this sounds, many people do not understand mortgages at the time they take them out. Setting your client up with an interest-only loan may be the best decision for a given situation; but be sure that your client understands that in order to pay the loan, he must also pay off the principal.
Make sure that your client has a reasonable amount of money to put down initially. Explain the details of the mortgage to your client in a way he or she can understand. Explain the benefits of each available loan, the importance of on time monthly payments and of paying off the principal. Giving your client all of their options is the most responsible and smart way to go about brokering a loan. After all, your job is to help your clients, not loan shark them.
Know the Mortgage Market
Because you are dealing with loans on a daily basis, you should know how they work! Knowing the benefits and shortcomings of each available loan will make your loan search simple and profitable.
If you know what your lender has to gain from you, you also know what you have to gain from them. Keeping up to date on the daily changing interest rates is an easy and intelligent way to keep your finger on the pulse of borrowed money.
Get Paid!
You don’t do all of this work for free, do you? If you are finding a mortgage for a client, you are a Mortgage Broker. You are an expert. You are familiar with your client and the lender, the loans and the homes. You have done your research and you have experience. Without you your client is like a fish out of water. You are providing your expertise and saving people time and trouble. This is your job and you have done it the smart way. Get paid! You deserve it!
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