I had a lady come into my office who needed to refinance her home due to a divorce. She had already started a loan with another mortgage company. However, she recinded her loan when she received the final package prior to closing. (Remember, because of the HERA/HOEPA act, clients now must receive a final TIL before closing, and if the APR changes by 1/8 or more, the client has to wait 6 business days(Saturdays count) before closing.
The reason she recinded: The mortgage professional assumed that the client wanted the lowest rate possible since she had just completed her divorce, so he charged her discount points, origination points, and put her in a 5/1 ARM(adjustable rate mortgage).
After asking the borrower several questions, what she really wanted was a fixed rate mortgage and the lowest possible fees. Thus, her interest rate was 1/4 of a point higher than I could have gotten her, but the payment was still affordable for her and the costs were considerably less, thus allowing her balance to not go up so much from her existing loan balance.
Does this sound familiar? How many times do customers get themselves into these type of situations because the professional did not ask the right questions or take the time to determine the customer's needs.
For loan officers, we always want to give them program choices and loan choices, whether it is a higher interest rate with low closing costs, or the lowest rate possible with the option to do an adjustable rate, if they are comfortable with that.
Same goes for realtors. If client can qualify for up to $300,000, are you necessarily going to show the client nothing but $300,000 homes, or are you going to take the time to find out the neighborhood they desire, the payment they desire, and the type of home they desire.
I have had complaints from clients to realtors that I have referred to who said that the realtor did not take the time to find out the type of home(s) they wanted. Instead, they just sent RMLS listing of all homes that were in the upper limit of what they qualified for.
It comes down to basics. Take the time to determine the customer's needs, and then you can define yours and your client's search more and avoid a lot of wasted time.
Thank you for your business
Paul W. Thompson
Home Mortgage Consultant
Wells Fargo Home Mortgage