Effective communication is the cornerstone of successful relationships, both personal and...
A recent Fannie Mae study highlighted that while most people dream of owning a home (92% of financial decision-makers!), many are held back by a lack of clarity around mortgages. It's totally understandable – the world of home loans can seem complicated, but it doesn't have to be.
The study found some really interesting "knowledge gaps" that I want to help you address:
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Down Payment Misconceptions: A whopping nine out of ten people either think you need a huge down payment or have no idea what's typically required. Did you know that many loans, including those backed by Fannie Mae and Freddie Mac, allow for as little as 3% down? Only 24% of consumers were aware of this, with the median guess being 10%. Let's bust that myth right now!
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Credit Score Confusion: Many also get tripped up on credit scores and debt-to-income (DTI) ratios. Nearly a third of those surveyed thought you'd need a 700+ credit score, but often, the minimum is lower, depending on the loan program. Don't let a perceived low score stop you from exploring your options. Most lenders allow as low as a 580 credit score when using FHA or VA Home loans. A great loan officer will also help the client move up that score by utilizing tools that they have access to.
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Understanding Underwriting Criteria: It's common to be unsure about the specific criteria lenders use and each lender has their own overlays. What is an overlay? The agencies set their rules which all lenders need to underwrite to. However, some lenders, and banks for that matter, often add additional rules and they addtional rules are overlays. Educate your future clients that it is ok to talk directly to your preferred lender to uncover the truths that they need to understand to prepare for their new home purchase.
But here's the really good news:
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Most people (93%) have checked their credit score, and 83% feel confident they can improve it. That proactive approach is fantastic and your lender can help them make the plan. Once the plan reaches its' goal, then they move to buyer status!
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Only a tiny fraction (3%) felt that qualifying for a mortgage was their biggest concern. This tells me that with the right information, most are ready to take the leap. Your job is to give them the reason to make the leap. Facts about homeownership and how it builds wealth is an awesome approach!
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About a third are already somewhat familiar with low down payment programs and many were not aware that 100% financing programs exist! Education is key to success.
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While websites and mortgage blogs are great resources, consumers want to fact check the information as a lot of informaiton online is old data and sometimes not accurate. The fact is that 40% lean on real estate agents for mortgage info. That just shows how important having a strong preferred lender is to your success as a REALTOR.
Create your team of professionals that you can rely on for accurate and up-to-date information.
Your real estate success is my priority. As the founder of Strategy4SuccessNow, I, Karen Jones, a Certified Mortgage Loan Advisor (NMLS #307015), empower agents with strategic marketing and tailored home loan guidance from Home Loans by Karen Jones. Let's build your most profitable business together.
