This morning I had a couple come into the office that was referred to me. They sat down eager and ready to make a purchase of their new home. They had begun to take the necessary steps in getting pre-qualified for a home. Currently, they are in a rental, in a county that they don't like or want to be in. Their goal is to move to Crossville, TN and be closer to Mom.
I began asking them questions like okay, what type of home are you looking for...2, bedroom, 3 bedroom and so on..I moved on to what area's do they like most in Crossville ? Do they want to be in the city or the county for example. I shifted the conversation to what they qualified for ? How much home could I find them based on the information provided by their lender. I was informed at that time they qualified based on their income for a home in the $30,000 to $40,000 range. Needless to say, that is not a lot of money or a lot of house. Nor are their a lot of options in that price range.
In Tennessee Manufactured Homes can be found and purchased within this price range but require work as well. I informed my new potential buyers that a lot of things needed to happen before we could conduct our property search and tour. Unfortunately, my clients did not understand nor ask the questions that should have been asked or at the very least been provided to them by their potential mortgage lender.
I had concerns with many issues throughout our conversation. Although Manufactured Homes / Mobile Homes could be sought after there are criteria's that need to be met before lending will occur ( at least that is what we have been advised of ) For example, many lenders require a Mobile Home to be on a permanent foundation before lending can occur and it has to be a double wide. Rarely do single-wides qualify for lending. Based on her information provided to me on her credit score she was skating the line of what I have been instructed as a credit score to qualify for a mobile home. 3 of the homes she came in with the intention to look at was that of a single wide mobile home. I say she, because she has the only source of income being Social Security and her husband has none.
As I further spoke with her and her husband they had no real idea if they only qualified for a site built home or had also been qualified for a manufactured/mobile. Although I am taking a guess her Mortgage guy assumed they understand site built they did not. All they new was the amount they qualified for. They have no money down and no money for closing cost's. Their Mortgage Professional threw a pre-qualifying amount at them and sent them to find the home of their dreams ! Although the Mortgage Company has no control over someone's income and qualifying amount their ARE things buyers need to know besides go find your house but do not exceed $40,000.
I wonder, did the Mortgage Company play nice and say yes, go for it..knowing that is an impossible find ...or...does the Mortgage Company feel that we as Realtors can wave some sort of magic wand...find a seller with a $30,000 house, make an offer and yet ask the seller to also pay for closing cost's ? With little to no education at all on the type of home they could purchase although eager and ready to purchase ...turned quickly into many questions unanswered
When I brought up closing cost's associated to the purchase of a new home, their response was :
He said, we will put that into the loan. Okay, great, however is that included into the qualifying of your $30-$40,000 benchmark or after. That changes the price of the home I have to look for.
I further explained that no matter the house, it will have to pass an inspection. Fixer- uppers in the $30,000 range probably will not ( especially around here ). They had no idea of inspections.
Their primary goal was to find a nice home, preferably 2-3 bedrooms with 2 baths, but would perhaps settle on 1 bath, with some sort of an out building. On at least 1 acre in a part of town that also requires a Home Owners Association Fee. Not understanding paying a monthly or annually homeowners association fee would further reduce their income, hence possibly lowering the amount of home they qualify for and with income of only $660.00 per month we are certaintly skating a very fine line.
In the end there are a lot of unanswered questions that primarily the Mortgage Company needs to answer.
Moral : Buyers NEED to be educated. Realtors cannot do it all. We have our area of expertise, mortgage companies have theirs, right along with inspectors, etc. I am not speaking of a whole to the Mortgage Company Industry. I am speaking of the ones who know we as Realtors will have a better chance of finding a needle in a haystack but you send off the potential buyer, uneducated on the Mortgage process leaving us, the Realtors to be the barer of bad news only to send them back to you for you to answer the questions only you as the Mortgage Lender knows.
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