Prepare clients for the mortgage application process

REALTORS® set the tone for the mortgage application, according to Aaron Gordon, retail sales manager, Bank of America, Las Vegas.

“Financing is much more challenging today,” Gordon said. He suggests building relationships with loan officers in your area to learn about their programs. “It’s important to work with all lenders because each one may have different programs to fit your client’s specific needs,” he added.

Gordon addressed real estate agents at the National Association of Hispanic Real Estate Professionals (NAHREP) and Asian Real Estate Association of America (AREAA) Convention in Las Vegas in October.

Gordon said REALTORS® can take steps to prepare their clients for the application process:

• Explain the documentation process. Sometimes documents can spur a request for more documents. It’s important to set homebuyers’ expectations to understand this can be cumbersome.
• The REALTOR® is the buyer’s expert. If the REALTOR® is arguing or questioning the lender about everything, it sets the tone. If the REALTOR® is calm and understands the process, it makes the transaction easier.
• Make sure the client is honest. Explain that lenders can try to deal with an issue if the client explains everything upfront.
• Consider writing longer contracts. With the large number of refinancings being processed, it’s taxing on the lenders and banks. Some programs today require more underwriting. A contract that’s 35 to 45 days creates less of a challenge.
• Know your property values. In working with different banks, short sales and foreclosures, it’s important to know the property values. The appraisal process today can also cause delays.
• Start communication between the client and the lender. Many people don’t have the cash they need to close. If you’re working with both the client and the lender, you can avoid surprises at the end.

Oscar Chow, Chase vice president of Multicultural and Affordable Lending, added that REALTORS® can help clients by:

• Identifying top-down payment assistance programs in their areas
• Learning more about Federal Housing Administration (FHA), municipal programs and lenders’ programs
• Teaming up with strong lenders who offer programs for different segments.

“The challenges in today’s lending process can be overcome by asking your client lots of questions upfront and explaining the overall process,” Gordon concluded.