Here is a helpful article sent to us by our ever-helpful lender friend Terry Heffner, Branch manager at Guild Mortgage Company:
Only one month into the year, and we are seeing the effects of the new Dodd-Frank Qualified Mortgage Rule, otherwise known as QM-3.
I believe in 2014 it will be imperative that borrowers understand the importance of getting their finances in order, WAY in advance of making decisions to sell, buy, relocate, etc…. Now more than ever, buyers need to specifically understand that the rules have changed. Whether your buyer is self-employed, a physician, or even a rocket scientist, there are real reasons to get the financing piece figured out, sooner rather than later.
This has always been the case, but with new underwriting pressures coming down from all the agencies and filtering down to mortgage lenders, nothing should be left to chance or assumed in the qualifying process. Please remember, many of your borrowers may not have been down this road since PRIOR to 2007, when everything changed. When you add in the most recent retractions and limitations put down by Dodd Frank and the CFPB, the process can be light years from what many buyers remembered it being! Preparing them for the process can make life easier on all parties and lead to smoother transactions! Making sure they are working with a reputable lender, with local processing, underwriting, and funding is a must as well!
That said, we want to offer some tools for you all to make sure you are prepared to emphasize the importance of the pre-qualifying phase, to ALL your buyers. Attached is an article originally put out by Forbes magazine, it accurately describes the detail of assembling a complete mortgage loan file. This is a great article to share with your savvy buyers, and first timers alike. After reading this article, they will understand what to fully expect when applying for a home loan. It’s so important for buyers to be accurately prepared for the process of buying a home. In fact, their satisfaction with their lender, AND Realtor depend largely on how smooth this process goes. Think for a moment of flying on an airplane. If, for instance, the pilot warns you the take-off will be bumpy, whether it is, or it is not, you are typically ok with the take-off. If he does NOT prepare you for a bumpy take off, and you hit massive turbulence on take-off, your flight is ruined and it’s hard to look back on that experience as positive, regardless of the outcome.
Make sure your next deal takes off smooth and lands smooth!