Agent's Corner: How to find the right type of loan for your client and why it matters
As an agent, you’re likely approached by lenders all the time who want to be a resource for your future clients. Those relationships are crucial, but it’s also important to understand the many different types of loan products available to accommodate your buyer’s situation – from first-time home buying to a second home to investment property. Not every lender will offer the same program. The thing to remember is that a no doesn’t mean the deal’s not possible. Maybe the mortgage type wasn’t quite right or the lender you approached wasn’t a fit, but that doesn’t mean you stop there.
If you get a no then keep asking your resources and see if you can find one to get your client to a yes. You just have to know they are out there and who the right people are to call. Keep reading.
Look beyond a 30-year fixed.
Mortgages come in a variety of programs, terms and specialties, but 30 or 15-year fixed-rate loans are usually what come to mind when buyers start the homebuying process. They will look to you to understand their goals and the current state of the market to identify the type of mortgage best suited for their situation. Although FHA loans are often the most affordable for first-time homebuyers, there are several niche mortgage options such as Adjustable Rate Mortgages (ARMs), condo loans and portfolio loans.
Know who to call for what.
Lenders are not one-size-fits-all and they often offer programs tailored for specific situations and property types. An ARM is great for a buyer who needs to buy something now and is waiting on an interest rate drop; a portfolio loan is great for a self-employed business owner. For physicians, attorneys or similar occupations, early professional loan programs could be a great fit. Most of them offer 100 percent financing, which means? No downpayment. Zero. Imagine how much value you are bringing to a client that has recently relocated to town and doesn’t know a lender who has this mortgage product. You’ll have a client for life.
Your clients trust you to look beyond a traditional mortgage loan to find the best option for them. For example, if you are approaching a lender that focuses on single-family residential mortgages, they’re not going to spring for a retiree’s investment farm. In fact, there are only two lenders in the state of Tennessee that specialize in farm lending (at the time of this writing), so you’ll need to get to know them if you want to close on any farms in the future.
Do your research and learn which lenders focus on what areas and be open to asking a lender if they are a good fit for your client – or if they know another lender that would be. Having the knowledge to approach lenders specializing in different areas is the value-add your clients are looking for in an agent partner.
The buck shouldn’t stop at no.
If you get an initial no, you can always recoup and try a different avenue. Go back to the drawing board and find out why they were denied. Make any necessary adjustments and assess who would be the best lender to approach to get to a yes. Adaptability and perseverance will ultimately get you to more closings with happier clients.
Once you find the ideal loan option for your client, The Row Title & Escrow is ready to provide closing, title insurance and escrow services. Need a recommendation for a specialized lender or loan product? We’ve been in Nashville for 10 years and we’d be happy to point you in the right direction, no strings attached. Contact us today to learn more.