BY KAREN SOLGARD , MARKETPALCE HOME MORTGAGE
A financed home purchase could be a smooth transaction or trail of tears depending on how the Realtor ® and buyer navigate the terrain . A few key tips can help Realtors ® close more successfully on financed home purchases .
Ahhhh … The good old days of cash transactions . Just a few years ago , most purchases in Southwest Florida were cash . Many lenders had fled Florida . Cash buyers were scooping up bargains . Now that housing prices have rebounded and the market is more stable , cash transactions in Southwest Florida are closer to the national average of 20 % of transactions . In hindsight , it seemed like a simpler time , but bargain basement home prices resulted in lower commissions . No need to be afraid of the risks of a financed transaction in this post-Dodd- Frank world . Lending guidelines do change and adapt to new circumstances . As more lenders come back into the market , and the competition increases , the changes are favorable to the buyer .
As a Realtor ®, the first moment to think about lenders and financing is when asking the buyer how they plan to pay for the home . If they need financing , ask if they have talked to a lender . If they have , do they have a prequalification letter ?
As the buyer ’ s agent , ask to see a copy . The prequalification or preapproval letter should be signed by a licensed loan officer with an affiliation to a licensed lender . Except for big interstatechartered banks , the loan officer and lender need to display their NMLS number . NMLS stands for National Mortgage Licensing System . Look up the loan officer by their NMLS or name in the system ( http :// www . nmlsconsumeraccess . org /). Each loan officer reports his or her work history and past affiliations . It sheds light on their experience and where they hold licenses . The loan officer must be licensed in the state where the property is being financed .
20 RPCRA . ORG | NOV / DEC 2017
Not all prequalification letters are equal . The type of lender determines their rules and loan approval process . The basic types include direct lenders such as the big banks , mortgage brokers who take applications to shop to wholesale lenders , community banks and credit unions which make their own lending guidelines , or correspondent lenders like my company , Marketplace Home Mortgage , which processes , underwrites and closes the loan and sells to a servicing lender later .
Call the loan officer on the prequalification or preapproval letter . Questions to ask :
• Is the loan officer and lender licensed in the state of Florida ?
• Is this approval for a property in Florida ?
• What are their estimates for homeowners insurance and property taxes on the subject property ?
• Are any HOA dues included in the calculation of housing expense ?
• Was a credit report part of the approval process ?
• Did the client send all the income and asset documentation that is required for approval ?
• Which loan program is this client approved for financing ?
• Would this buyer qualify for other loan programs if it were necessary to make changes ?
• Are there any issues or concerns about the buyer to be aware of as the Realtor ®?
The differences between prequalification and preapproval can be subtle . Here are some basic distinctions : 1 . Prequalification could simply mean that the loan officer took an application over the phone , in person , or online . 2 . Preapproval ought to mean that the loan officer has received and examined all the income and asset documentation . 3 . Conditional approval is from an underwriter who has examined all the documents . There may be requests for further documentation .