Hi Jeff, Thanks for posting this. I run into this So many times.  We have high Property taxes here(as I hear you do in NJ) and it takes many people down on purchase price by $10's of thousands.  Thanks for letting your agent's client know the truth!  It's tough to explain this to clients when "the expert LO" has told them differently.

Thanks to all lenders who are up front and honest!

That looks like one happy little girl in your photo!  I wouldn't want to tackle your business in the current climate- it seems that in order to gain business, both the real estate community and lenders are doing some grasping.  The end result is a dissatisfied and disappointed customer- better to have them get with someone like you right out of the gate.  Saves everyone (especially the client) time and energy.

where have you been?

There needs to be better comunitcation between the Mortgage broker and the Agent.  With all of my clients I ask them if I can speak directly to their agent to let them know what is going on.  It is not that the client is wrong about what they think they are qaulified for, they just haven't taken everything into account.  This is a stressfull and exciting time for your client so they are not going to remeber every detail.  The more we help the better it is for everyone

Thanks for the post.

Matt

Stephanie...  my pleasure. Yes, property taxes can kill a deal if a loan officer doesn't use the correct taxes. I have seen many examples of this.

Overall.... it's not hard telling the agent's client the truth, it's when they don't listen to you and say...."the loan officer guaranteed me and it's in writing"...meaning the good faith estimate. This is what kills many of my potential deals.  thanks for your feedback. 

Laurie.....thanks, that's my niece....  in regards to grasping.....  certain loan officer's and lender's have been grasping ever since I got into the business.  It's called 'bait and switch'...   but yes, even more so now, because business has dried up for many, which means more lying.  It's sad and ashame.

Dave..   busy with life in general. But thanks for asking. You will see more of me again.  thanks.. 

Matt.... you flew under the radar there...   in regards to your comment, I slightly disagree. Sure, communication is very important, for any part of the transaction. Did you read the link to the rest of this blog?  Some loan officers will leave information out. Sometimes by accident, sometimes on purpose. Why on purpose?  It's harder to shop when you don't know the payment.

So, why not blame the client for not asking?  When you go buy a car, once they tell you that you are approved, you don't go 'okay, where do I sign?"  You want to know what the payment is first. But the problem here is that some of these lenders prey off the fact that Buying your first home can be intense....... as you stated....  and they don't know all the questions to ask. Or get overwhelmed....  thanks for your input.

Jeff....thanks for sharing this! Yes I agree that asking the right questions is crucial. The first question I ask my clients is how much are they willing to pay a month for thier mortgage. It is not only a matter of affordability but also confortness. Some buyers are hardly at home becasue they are taking two to three jobs after buying a home just to afford thier mortgage. You are supposed to enjoy your home not outside all the time working. You should have control of your life. Unfortunately for some buyers thier mortgage payment control thier lives.

Another important question is to ask them on how long they plan to keep the mortgage and what kind of mortgage program they are interested in. Many mortgage professionals are taking advantage of selling low payment programs (exotic loans, neg am) to the wrong people just to get them into the house with total disregard to an inevitable problem in the future. Most mortgage professionals are guilty of loan steering just to close a deal.

I beleive in spending time with a client and educating them.

Great points, Jeff.

I alway tell my buyer clients who are getting pre-approved to ask about the monthly payment if they are not told by the broker. After all, isn't that the bottom line? They need to know this, PLUS taxes, insurance, HOA fees, AND their personal budget (after taxes) so they know if they can really carry the amount the lender says they can. It is often a big surprise.

Jeff

Jeff,

Good stuff.  Also, welcome back to blogging, I missed seeing you here.

When I qualify someone, I try to overestimate taxes and insurance, that way that don't have issues down the road when the numbers come out lower.  I have lost clients to other lenders by doing business this way, but I never bait and switch and I end up with happier clients.

Jerome..... asking the right questions is always important. But so is giving all of the correct information from lender to borrower is just as important.

In regards to your 2nd paragraph... I agree. This was mentioned in the blog in which I stated, "you need to get to know the client's 'goals'. 

Overall, you make some great points. Thanks for your input and feedback. 

Jeff D. ..... for some reason this seems missed more than it should be. And I just don't get it, why a client doesn't always ask about the payment if they aren't told. That always baffles me. Thanks for the polite compliment.

Robert.....  I always overestimate a little also, which I have lost some loans because of this also. But at least we can sleep at night. Even after I tell the clients that I over price or over estimate certain things for certain reasons.  And thanks for the comments......

Jeff - I hope you find this as funny as I do - but when I went out to your other blog I thought - why is he sending me to a blog of another lender - I did not recognize you - the professional photo is great!  The post was as always informative.

Jeff,

I like your new blog, very tastfully done.  Even though I'm not a lender, (I have one inside of me that wants to be fed lender info) I enjoy your posts and use the information to assist my clients in finding the right lender for them.  I have learned a lot reading lender posts on AR.

Fran

Thesa.....   lol...cute. It's because this is a hobby for me, not a job....  ;o)   And please, anyone reading that, please disregard that. I will help anyone with any type of financing.

And thank you very much for both comments...  much appreciative. 

Fran..... thank you very much....  that's very kind of you to say that. Overall, thanks for the comments. 

uh oh...Jeff has his own blog site now!  Better watch out! 

Interesting story...that agent must have been pretty smart having a great lender like you talk to the prospective buyer first!  :-)

Hi Jeff,

Good to see ya' back.  Yes, we indeed tell our buyers to ask their mortgage rep what the estimated monthly mortgage payment will be.  No surprises usually equates to happy customers and happy customers will refer. 

I recently sent out a good faith estimate that was truly as accurate as I could make it. This is assuming an amount for taxes, insurance, HOA's,Etc.

The borrower asked if i could give them a leaner good faith because other lenders were much lower on the estimated costs.

I told them that in the past, that kind of estimate only put the borrower in trouble at closing because when the true fees were included, the borrower was scrambling for closing costs because of the lean amount.

The borrower responded that they appreciated the advice and since have sent a referral to me.

Keep the information honest and even though it is an estimate, experience will tell you what is probable. 

Ravi....  funny.  And yes, a very intelligent realtor I would say. :o)  Thanks for the referral.

Lisa..... sure, we can tell them also. But this doesn't always help. But as you stated, have them ask their lender what their payment is.

Keith....  well, I wish there were more like us that would do this. And yes, referrals are very important to me also. So if you do the right thing and a great job, you hope that it comes back to us.  thanks for your input.

I see you regained your so. I think u were trying to reach me . I am still in italy currently rome' amazing city. send me an email if you need something

I carry a financial calculator with me so that I can do on the spot payment stuff for my clients. And I try to learn whatever I can about lender stuff that can help me help my clients. Not only does it help make the idea of buying real and immediate, it develops the relationship by opening up the other conversations that are really necessary to help a client reach their needs.

I have also learned that people seem to fear asking finance questions of their lenders! Things they need to ask over and over. But I think they are afraid of seeming uninformed. (And these are very good lenders who try to educate as much as possible.)

By the way, if anyone reading this doesn't now how to use a finacial calculator, the CRS 105 course is simply outstanding! (I know a few loan officers who ought to take it LOL) It is "Making The Right Real Estate Finance Decisions".

Desiree.....  Thanks for stopping by. No, I wasn't trying to reach you......  but I hope all is well and that you are enjoying Italy....

Sarah N....  you make some good points here....  thanks for sharing this with us.,