March 18th, 2019
Bankrate.com did a recent survey of almost 2700 people asking them what their main barriers to homeownership were. The number 1 answer: inadequate income. The article goes on to give some good advice to borrowers on what to do to make sure they understand the expenses of homeownership, including things like knowing your income and being aware of unexpected expenses, which is something we talk about a lot at Mortgage Champions. An analyst at named Deborah Kearns had a great quote when giving advice to borrowers, saying “You need to look at what is your list of monthly expenses, including what a lender doesn’t consider when assessing your eligibility for a loan. You need to take into account all of the other bills.”
We talk about this a lot. It’s always been a trend that people buy homes they can’t afford. The problem is that most of the time, those people really do think they can afford it but other expenses pop up and make finances very tight. We’ve seen reports where many Millennials are now reporting they regret buying their homes because the payments are a lot more difficult to manage than they expected. This means that loan officers need to truly inform and educate their borrowers on everything to expect when buying a home, not just in the mortgage process, but for years after as well. If someone has a young family, you need to discuss daycare expenses; or if someone has a long-distance commute, you need to discuss both the monetary costs and time costs of that; if someone is buying their first home, talk about moving expenses, and furnishings, and house maintenance costs, and all of the other costs that don’t typically appear on a 1003. In today’s market, the best way for a loan officer to survive is through repeat and referral business, which means your borrowers need to be extremely happy with not just the process, but with their financial scenario after the process ends. That means you have to be an expert on everything involving homeownership, instead of just being focused on closing a loan