Agents, our world now has higher mortgage rates, fewer qualified buyers, fewer investors transacting, and a whole lot of uncertainty. It’s lions, tigers, and bears out there, and that puts pressure on you to work with the most qualified and motivated clients. The only thing more scarce than inventory is your time.
In order to make the same or more income than you have in the past few years, you’ll need to upgrade your skills. This means learning about mortgages other than the low interest rate, 30-year fixed with 20% down, which has been so standard for so long. But just because rates are hovering around 7% doesn’t mean your buyers can’t find a mortgage payment that works for them.
Upgrade your mortgage knowledge so you’ll be able to counsel your buyers and the buyer’s agent. You don’t have to know how to do loans yourself, but you do need to know what questions to ask of the lenders you’re dealing with. Not all lenders specialize in all types of loans. Your smartest move is to have several different types of mortgage lenders so you can recommend the right ones for your motivated buyers.
You’ll find a list of questions below to ask your loan officer contacts over coffee. Take good notes and know who does what, and you’ll be a confident, stronger, and more skilled agent.
Questions to ask any mortgage lender you may work with
- What types of loans does your company specialize in?
- What other types of mortgage loans do you offer? Adjustable rate mortgages?Conventional? Jumbo? Stated income?
- Do you keep any of the loans or are they all sold on the secondary market? (A lender who keeps loans is called a portfolio lender). Some will keep 100% of the loans in-house, while others only keep certain types of loans in-house. Portfolio lenders are sometimes more flexible with their requirements.
- Do you do FHA, VA, and first-time buyer mortgage loans? Do you have any special programs for first-time buyers?
- What is your average processing time from application to close?
- What are your lender overlays?
- Do you offer rate locks, and do they include a float-down feature? How long can a borrower lock their rate in? What does it cost to extend the rate?
- Do your loans come with an “assumable with release” clause built in?
- Are there prepayment penalties if the borrower wishes to refinance or pay the loan off early?
- What is the cost to buy down the interest rate by 1%, 1.5%, etc.? Is there a cap?
- What are your credit requirements for your lowest interest rate loans?
- When a borrower is denied approval due to their credit, do you disclose to them the specifics of why that decision was made? (Note: They are required to do so by law.)
- When during the process do you actually check the buyer’s credit, and what is the system you use to do so? Do you re-check prior to closing?
- What special programs are unique to your mortgage company? Grant money? Teacher, police or first responder programs? Opportunity zones lending?
- When you have buyers who become pre-approved or apply with you but they don’t have an agent yet, will you refer them to me if I refer business to you?
- Do you send a specific lender letter or use a boilerplate version? Do you have any locked-in guarantees for buyers once they are through underwriting? Do you call the listing agent to vouch for buyers you have underwritten or pre-approved?
Your lender friends will thank you for referring them the right type of borrowers, and maybe even refer buyers to you as well. The more we can all work together, the easier this business is.
Tim and Julie Harris host a podcast for real estate professionals. Tim and Julie have been real estate coaches for more than two decades, coaching the top agents in the country through different types of markets.
