FannieMae, FreddieMac (conforming loans) conventional, non-conventional/ non-conforming, FHA, sub-prime, they have all gone to "Risk Based" pricing. This means that the lower a borrowers credit score, the more they will pay for upfront fees and interest rates. Thus, pricing a lot of potential buyers out of the housing market. There is something you can do about this. Make sure the lender you use can help the client understand the impact their credit score has on their ability to either obtain financing or obtaining favorable rates and terms for their loan. We know the banks don't understand, because they refer lower score clients to us all the time. The bankers don't have the time to educate clients on how to manage their credit score, nor do they have the time it takes to work with them. A loan officer that specializes in credit score issues is a valuable asset to your professional team. It is useless being a great negotiator for your clients if the financing is doomed. You can get the best deal out there but unless the buyer has scores that will qualify for favorable financing terms, the deal won't be so great. If it closes at all.
Mortgage Planning is becoming the current method of educating clients on the most expensive purchase of their lives. It should be treated with the respect that it deserves. With the average home price of over $325,000 in Snohomish County, the financing should be one of the major concerns of any buyer. A half of a point here and a half of a point there adds up to a lot of money, either up front or in their monthly payments. And sometimes both. This can be a deal breaker.
A mortgage professional today understands the huge affects that credit scores play in determining the clients ability to obtain favorable rates and terms, or if a loan is even possible. The mortgage professional needs to be able to educate clients on how to manage their credit scores so they can get those scores over 680 and even well into the 700 range and keep them there. However, there seems to be no greater mystery than what makes up those scores and how to get and keep high scores. We understand what it takes and have educated clients on score management for years. We are the recognized experts and have taught workshops for the past 7 years to hundreds of clients, even to the local bankers.
In today's market you need every tool in the box to help your client and to help yourself. It is a changing and different market than it was even six months ago.
We have created some great resources for both real estate agents and clients. For Agent tips, articles and great business boosters go to http://www.htlnw.com for more information. Also an excellent client resource is http://www.WaMortgageTips4you.com
There you'll find all kinds of information regarding home financing as it relates to us locally.
Don Davis
Don can be reached at dond@htlnw.com
Don specializes in residential and commercial lending in and around Snohomish County Washington
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