Whether your client is looking to finance a purchase or to re-finance a currently owned property, it is the borrowers' credit worthiness that makes or breaks the deal. The house is only important where it relates to the likings of the clients. The appraisal is based on data that cannot be "controlled".
So, the question facing the real estate pros or the client is; "Can I/they afford this payment and the risk it may possess?"
People qualify with adjustable rate mortgages for many reasons. Some realistic, some not. I have been involved in banking for some time, and for the last five years I have been involved with mortgage pricing technology. My company is the first company to supply a universal mortgage pricing and eligibility factoring product to the mortgage industry and is the premier non-prime pricing/eligibility tool in the country. While that is not fully pertinent to this blog, what is pertinent is that we also have quality data regarding adjustable rate mortgages as they compare to fixed rate loans.
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When a client comes to you, as a real estate pro, you need to know if the client can afford the property they want you to show to them. If they want to see a $400,000 home, it is important that they can afford it or you will all be wasting your time. A common initial question posed to the buyer is "Have you been pre-qualified?" That can be a complex issue. What is a pre-qualification and how good is it?
I would like to make it clear that pre-qualification does NOT guarantee that a borrower will definitely get that mortgage loan. It simply means they have passed a certain level of muster and must now prove their eligibility through the presentation of documents to prove their credit worthiness. The approval only comes after ALL of the information is consolidated and vetted and the lender gives their approval "clear to close" documents.
Our current mortgage technology (http://www.freeratesearch.com) is state of the art and there is no other place on the Internet where you can get complete mortgage loan pricing, fully vetted for ANY credit type. Our software will tell you whether or not your customer will qualify for a particular loan. You CANNOT get customized pricing anywhere else on the web. People think that mortgage prices are found everywhere and when I tell people what I do, they say "Well, aren't there mortgage rate pricing sites all over the place?" Fact is, there are. But the prices you see do NOT relate to your borrower. They are nebulous and generic and almost never give non-prime rates. Prime rates vary only a little bit.. for the most part, about 1/8 of a point either way. Alt-a and non-prime can vary almost 2 full points from best to worst comparing identical loan types. That is why it is so important to use technology like ours to find the best rates, not just the best rate the loan officer THINKS they know about. A lender who has the best 2 year adjustable for a high Loan to Value-Low Score combination, is probably NOT the lender with the best 30 year fixed for the Medium LTV-higher score combo.
Our system will determine the BEST loan a person can get, whether it is prime, non-prime or in between (Alt-a). It determines this by using the data that loan officers would use to pre-qual a client, and more, but does it much more efficiently and quickly. But, more important, we check the data of DOZENS of lenders, all at once, and return the results instantly. No loan officer in the world can check that many, accurately in any time frame. So, when a loan officer pre-quals a client, how do they know they have even found the best rate?
**Our data shows that when checking the borrowers' criteria across the board against numerous lenders that adjustable rate mortgages are not needed in almost every case. This is particularly poignant with non-prime borrowers. In fact, loan officers who use our wholesale tool can see that the best 30 year fixed loan is better than MOST of the 2 year adjustable rate mortgages. So, why would anyone find themselves with an adjustable rate mortgage in the first place? Because the loan officer didn't know where to find the BEST 30 year fixed.
You can get more deals done by using our tool. Rates are updated multiple times, daily.