Information That Every Realtor Should Know Regarding Today’s Mortgages
It is safe to say that even if you are considered to be one of the top-performing realtors in history, if your clients do not have the money necessary to purchase a home, it does not really matter how well you are able to sell spots to a Dalmatian.
There is an old saying that you may be familiar with that says, ‘money is what makes the world turn’. Whether this is true or not is up for debate. However, this saying can be applied to the real estate sector because I have never seen a house that was free.
All of this is an introduction to current topic of discussion, and that is information that realtors must know about regarding the new mortgages of today. (First off, let me disclose that I work as a coach with several lenders including the US Mortgage Corporation, Freddie Mac and Fannie Mae). Truthfully speaking, the mortgage industry is in a good position at the moment. There are funds available for potential homebuyers, especially those buyers who do not have wads of cash lying around. As the uncertainty of the recession has slowly drifted away, there is a much brighter gateway to getting the money needed is possible.
In other words, the more that realtors are knowledgeable about today’s mortgages, the more helpful you will be for your clients. In addition, you will be a step above your peers who have not done their research on the new rules and information regarding mortgages.
Once you are able to get your clients qualified, you are prepping the entire process so that it will go smoothly. Unfortunately, many realtors are not knowledgeable in the major and minor points of financial products and mortgages that are available to homebuyers.
Construction/Permanent Mortgages
This is a mortgage product that all realtors should have in their arsenal. This mortgage has three different phases that allows applicants to finance new home construction. It is quite often that applicants are able to get a permanent interest rate and also be able to close the loan even before the construction of the home starts.
This means that the homebuyer will be able to choose a lot that they like, get financing for the construction and put all of it together into one home loan. So, if as a realtor, you find that you do not have enough properties, you can always choose to create your own available properties. You can do this by building your own inventory.
FHA 203K Mortgage
A FHA 203 K mortgage loan is a great financing product that every realtor should learn more about. The following is an excellent reason why. I had a homebuyer who recently purchased an owner-occupied property that had four units. The property was valued at over $700,000 and each one of the units in the property had been renovated. It also has a future value that he had appraised at $1.2 million.
With a small down payment, FHA lending and rental income that is based on Section 8, he was able to qualify even the ratio between income to debt was rather large. If I had not been aware of this mortgage product, I would not have been able to give my client the information and service he deserved so he would be able to own the property. This does not mean that you need to know every single detail about mortgage products, but you should know the different options that are out there for your clients.
Programs For Assistance With Down Payments
It was not that long ago that if a homebuyer did not have the money to purchase a home, there were no other options. However, that is no longer the case. There is assistance available for those who need help with a down payment, and in many cases, these loans are forgivable after a certain amount of time.
There are also some programs available for those who need assistance with the closing costs and/or programs for those who want to reduce the rate on the interest. Take a little time and find out what types of programs are available in your local area, and then find out which lenders in your area offer these programs.
HomePossible And HomeReady Mortgage Loans
Another mortgage option is the Fannie Mae mortgage loan option known as the HomeReady loan. This mortgage product was created for those with good credit, but they are classified as low income or moderate income homebuyers. A HomeReady loan also features eligibility for financing in communities that are considered low-income.
There are two features that are specialized with HomeReady loans. Applicants do not have to be purchasing a home for the first time. The second feature is that financing is available for up to 97% for buying a single unit residence.
HomePossible loans are considered a close relative to HomeReady loans. HomePossible loans are offered by Freddie Mac, and they are an ideal mortgage product for families who do not have the money saved towards the purchase of a home. Were you aware that homebuyers can get assistance for their down payment from employers, members of their family, and other financing choices. Potential homebuyers can find out more about these choices by speaking to lenders.
As you go further into the mortgage industry, you should also consider learning more about US Mortgage Corporation. This lender has been around for decades, it is an excellent starting point to find out more about different loan categories:
Conventional
VA
USDA
FHA
Reverse
Jumbo
The objective is to never allow mortgage options restrict the way you choose to work with your clients. There is money available for mortgages. Once you understand the different ways you can help your clients get the money that you need, you will finally become a realtor who is worth the high fees. You will also become the real estate agent who will be able to say yes to your clients more often than not.
