To most borrowers, getting a mortgage sounds simple enough. So why do so many of them drop off between approval and closing? As it turns out, lenders often forget how mysterious the process may appear to new borrowers. A change in income or debt can disqualify unsuspecting borrowers seemingly out of the blue if they’re unaware of how mortgage lending works. Not surprisingly, this hurts everyone involved, including lenders. So what can you do to help your clients be better borrowers?
First, education is key. Especially for first-time home buyers, the process of purchasing a house may appear unclear or even overly simple. To avoid deals falling through, make sure that your clients understand that any changes in debt or income can affect their ability to take out a mortgage. Borrowers should have a clear understanding of what circumstances can affect their ability to purchase a home in order to be confident in their ability to pay.
Additionally, those applying for a mortgage should understand that the down payment and monthly costs are not the only things that they will have to pay. While lenders must make as accurate estimates as possible when creating their estimates, borrowers may forget to factor in costs like the various tests and inspections that take place before closing on their home. Additional costs negotiated with the previous owner might come up as well, so borrowers should be prepared to have extra money put away to cover the costs.
Thankfully, for lenders looking to better educate their borrowers about mortgage loans, there are plenty of resources available online and for printing. Just by providing the proper resources, you can help your clients become happy, confident first-time homeowners. Considering that your ability to meet your customer’s needs determines your business’s success, your clients’ best interests should never be overlooked.