With foreclosure rates reaching all-time highs, I try to do my part to combat as much of it as I possibly can. One way that I choose is to stay in constant contact with my clients that have Adjustable Rate Mortgages. I made it my business to explain to each of my clients, during their loan process, how the adjustable interest rates work and also made it a point to stress the importance of improving or, at the least, maintaining their credit profiles.
I choose to stay on top of my clients because I care. I've been finding that a lot of homeowners with adjustable rates forgot that those rates would soon adjust (more than likely upwards) and therefore their mortagage would significantly increase. The pattern seems to be late payments here and there, a few new collection accounts and believe it or not, more incurred debt.
Fast forward... Now, it's time for the rate to adjust and their credit has diminshed and they can't refinance. So guess whose stuck with a mortgage too high to fit into the budget? If only they had stayed on top of their credit profile. :(
I never want any of my clients to feel that I'm patrolling them but at the same time I'm sure they'll appreciate me when they can refinance out of that ARM after reading or hearing about a family that lost their home because they couldn't refinance (because of poor credit) nor could they afford the new high adjusted mortgage.
It's just food for thought... if you have clients with an adjustable rate, stay on top of them. They may just love you for it.
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