Loan officers rely on you, as the agent, to set the stage for your new transactions in much the same way you rely on them to get your buyers ready. Your expertise and collaboration during the early stages of the deal are invaluable. Quite often delays in the transaction can be traced back to missing or inaccurate information relayed to the loan officer as contracts begin to materialize. Loan officers crave smooth efficient mortgage transactions just like all parties to the transaction – ( We may even dare to say ‘More Than’ on this one). Here are the top 10 things loan officers do wish of their real estate partners.
Wish #1 through 9: – The Agent Calls the Mortgage Broker First:
– As in the moment the buyer is ready to submit an offer. Why? – Loan rates fluctuate daily, sometimes several times per day and it’s crucial for both you and your customers to know if the current rate aligns with the rate used to qualify your buyer. This is especially crucial in a rising rate environment. Additionally, this is an opportunity to confirm that the inputs used to pre-approve your buyer still hold true. This goes beyond confirming income, credit, or available funds which certainly impacts the viability of your deal. Loan officers wish they would get the heads up on things like: the presence of additional hamlet or village property taxes; tenancies that will survive the contract closings; the seller’s need for an extended close date; property having unpermitted improvements: and the infamous “buyer will make up the difference if the appraisal comes in short” condition of the offer. All of which can alter everything from the loan product used, to rate lock period, the appraisal, and even the buyer’s ability to qualify. Pre-approval letters speak to loan amounts- the non-financial information shapes the structure of the loan and how the loan is packaged for underwriting approval.
Examples: A loan structured based on market rents can go south very quickly if the current tenant will remain in the property and continues to pay below market rent. The market rents can lo longer be used to qualify because there is a contracted tenant paying less, even if the tenant is on a month to month lease.
OR
Let’s say your seller is waiting on their new construction home to be ready before they will close on the sale to your buyer – If your loan officer is not aware and locks your buyer’s interest rate for a short time upon getting the clearance to close – Both contracts become in jeopardy if the buyer burns through money that was set aside for closing and reserves in order to pay rate extensions or worse your buyer has to choose to let the rate expire so not to pay the extension fees only to relock down the line at a higher rate for which they no longer qualify. The buyer’s loan must now be restructured to main approval which means back to underwriting and yes- the underwriting process may have to start all over again if the program changes or additional applicants need to be added to the loan file.
Lay out the Terms Upfront with Your Mortgage Broker:
Wish #10: The Agent Leaves Loan Product Selection to the Loan Officer.
Loan products cannot be seen, touched and handled like other physical store products. Just like store products rest assured they are as real and as varied. Like physical products, many may have similar features and share some key ingredients, however loan products are not all the same. The loan product selection based on the actual circumstances is best prescribed by the loan officer after a complete analysis of the borrower;s financial information AND the circumstances of the transaction itself. When the loan type is prescribed on a contract of sale, it can lead to added delays on the financing end because the product prescribed does not properly match the transaction scenario itself, not necessarily the buyer’s profile.
What should a realtor do if the seller is nervous about a buyer’s loan selection?
See Loan Officer wishes 1 through 9 above.
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