Not everyone shares the same experiences, which is why sharing them can be very beneficial. You do not only share something that took part of your life but the lessons that can be learned by the person you are sharing it with.
As real estate agents, seeing your client’s purchase a home may be very fulfilling. However, carrying the job title of a real estate agent gives you the responsibility to impart to your clients as much information as possible before they make one of the most expensive purchases in their life.
Here are mortgage mistakes you can share with your clients:
Ignoring the numbers
Owning a home for one can be easy, especially when banks make it all easy for you. However, letting your clients ignore the true costs of their loan can be a disaster. Make sure that you educate your clients regarding the estimation of their payments, their interest rate, and length of time of their loan. For instance, if they have to borrow $300,000 to buy a home for 30 years at 4% this will cost them over $580,000, with a total interest rate of $280,000, and a monthly payment of $1,600.
Allowing the bank to dictate
Allowing your client to be caught in most bank’s financial net can be dangerous. Advise your clients that they have the option to determine the monthly payment with which they are comfortable.
Considering employment and credit limits
Lenders, especially banks, before loaning money to the borrower, want to see consistency in the borrower’s employment and want to know what the client’s credit limit is. So, advise your clients not to take on new loans, or max out their credit limits; otherwise, they may not be able to borrow as much as they would like.
Often, buyers will attend an open house before dropping by their bank. This is a common mistake that you should tell your client to avoid. If your client is not aware of their loan limit, there is no point in visiting homes that they cannot actually afford.
The duration of a mortgage granted by banks is usually set at 15 years, but your clients also have the option to stretch it to 20 or 30 years by opting for a money saving program. All they have to do is to talk to their banks or lenders.
Over estimating income
Before applying for a loan, your clients need to know exactly how much of what they earn is available to compensate for the loan that they will take out.
Clients do not have to stick to the seller’s price. They can hire appraisers who set the property’s value.
Less down payment
Make sure that your client has enough money for equity; otherwise, their mortgage may not be affordable.
These loans make sure that your veteran clients will not overpay for their mortgages.
Your client may think that the longest amortization period they canhave is between 20 to 30 years, but there are banks that can stretch the length up to 40 years.
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