When buying a home and applying for a mortgage in order to pay it, a series of questions and risk tests must be met by the bank. In other words, it qualifies us as buyers or payers to know if we can return the money in a timely manner. Qualifying home buyers is a common practice in the real estate sector and it copies a bit of what banks do.
What is homebuyer qualification and why is it necessary?
The first thing we have to understand is that this rating or classification is nothing more than getting an idea of the profile of the client with whom we are going to interact, in this case, home buyers. In the sales sector it is important to have an idea of the people you deal with for several reasons, the first to get to know them better and know how to treat them, and the second and, perhaps most important, to offer them a product and a service that interest.
Imagine this situation, you want to buy a home of 90 square meters and you have a budget of approximately 120,000 euros and you go to a real estate agency to request estimates. However, the real estate agent classifies you badly, or does not understand you and thinks that your budget is higher, let's say above 200,000 euros, and offers you homes that do not interest you, I often fail, right?
Or, on the contrary, it shows you homes that you can afford, but not those that fit into your style, or fit some of your preferences, for example, the location, the number of rooms, that has a garage, in short , does not meet your expectations. Here the real estate professional would do a bad job, and the most curious thing is that he did his job well, but you did not communicate well.
Hence the importance of real estate agencies, banks and private entities that are dedicated to the sale of real estate establish a protocol of action with future buyers. This protocol is the first step in qualifying home buyers. This classification is nothing more than establishing an initial profile, which we remember can be changed later, but it serves as a basis to get a first idea of what the client is looking for and how to act with it.
What are the processes for buying a home?
Think that a buyer is going to go through the following processes; therefore it is important to classify them to know where they are and how to act with them.
- Information and market search for the desired property .
- Initial approval of the bank.
- Search for the real estate agent or agency.
- Property review.
- Choice of floor.
- Present offers to the seller.
- Acceptance of the offer.
- Open a deposit, go to the notary and all the bureaucratic matter.
The question then is the following; How do we make this rating?
From a realtor's point of view, the first thing to do to qualify home buyers is to ask the right questions. In this way, you know who you are dealing with, the kind of buyer in front of you and, most importantly, what that buyer demands.
You have to think that you cannot walk blindly and that we must establish a common framework, a map or a roadmap that helps us improve the relationship with our client (in this case, the buyer) in order to offer a better service. And you have to think that buying a house is not the same as going to the supermarket to buy fruit, vegetables or a pizza, buying a home is one of the most important decisions in a person's life , therefore, you have to pay special attention to get the property of our client right.
Thus, we will achieve two things, the first a happy client, the second and perhaps the most important to help them decide something as valuable as the purchase of a property, and the third to build a reputation as valid and professional sellers or real estate agents. In this way, it is possible that we get many more clients by the mere fact of the good opinion that buyers leave us when they give us as a reference.
Have you not bought a product, a trip or a service based on the opinion of the comments? Something similar happens in the real estate sector, reputation precedes the image of a real estate agency, a professional or agent dedicated to the investment and sale of properties. Therefore, you have to take care of it by asking the right questions. But what are these questions?
Home buyers are in different stages, the first thing is to establish what phase they are in. He thinks that a buyer who already has the money, wants to see a flat and can pay it at the moment and do it in a matter of days, is not the same as another who is undecided about the guarantees and needs some time to formalize with the bank all the mortgage paperwork and so on.
Therefore, we are going to ask the following questions, all focused on the economic plane:
- Have you been informed before buying ?.
- What kind of information have you collected?
- Have you looked for a bank entity?
- Do you have a budget or draft of a mortgage? If it has been denied, what have been the causes?
- Is there a favorite bank or entity to try or is it indifferent? What is the maximum budget?
- Looking for a new or second-hand property?
- Do you have an endorsement?
- What is your financial situation? Do both members work or just one?
Once we know how far a buyer can go, the next thing is to find out what kind of home they want. It is not the same to sell a duplex, to buy a two-bedroom apartment or an apartment for a single couple who do not plan to have children. We must adapt to all this and take into account the people interested in the purchase.
Hence, we ask questions to find out the buyer's profile based on the size of the home, rooms, garage, and other characteristics they are looking for.
Once we find out how they want their house to be, it is time to find out which area or neighborhood they want to live in. Next, we will ask them for as many details as possible to establish a profile as complete as possible and thus find out what they are looking for.
Likewise, we must make sure of what they want and know if they are open to possibilities such as buying off plan , real estate crowfunding, crowlending or loans between individuals , etc. Think that many people are looking for an apartment and when they do not find what they are looking for, they open up other possibilities that allow them to find something similar to what they are looking for.
Finally, we cannot forget the advantages of hiring a real estate agency to deal with sellers or buyers, think that they are professionals who know the market and will save us time, money and effort in the search for the desired apartment, and not only that, but also They will help us with the purchase when dealing with the seller since they know perfectly how much a property is worth and can help us determine the exact amount to pay in order not to exceed our budget.
If You Are Interested In Finding Out About Home Mortgages? Read This
You surely are excited if you're considering home mortgages. It's time for you to get a home! However, everything you might realize could there be is a lot of information to take in, and how can you sort this out to access the mortgage product and company that you need? Please read on to find out how to do that.
Do some shopping around if your 20% deposit has run out of your league. Different banks may have different offers that you should consider. Terms and rates can vary at each, most will give a lower downpayment, but a slightly higher interest rate. Look to find the best mix for your personal current situation.
Obtain a pre-approval letter for your mortgage. A pre-approved home loan normally helps make the entire process move along more smoothly. It also helps because you know how much you can manage to spend. Your pre-approval letter may also range from the interest rate you will certainly be paying so you will find a wise decision what your monthly payment will likely be prior to making a proposal.
Prior to going right after a home mortgage, Organize your financial life. You'll simply make the whole mortgage method that a lot longer when your paperwork is all over the place and confusing. Do yourself along with your lender a big favor and set your financial papers as a way prior to making any appointments.
Cutting your debt whenever possible will increase the chances of you being approved for the mortgage. In case you are not inside a good financial situation, meet up with a consolidating debts professional to get rid of debt as soon as possible. You do not must have a zero balance on the credit cards to obtain a mortgage but being deeply in debt is certainly a warning sign.
Consider making an additional payment along with your regular payment per month when you have a 30-year mortgage. The additional amount will be put toward the main amount. It is possible to spend the money for loan down much faster and decrease the quantity of get your interest pay, if you make extra payments frequently.
Look closely at lenders. There are several companies willing to lend your cash to finance your home. They are not all equal. Check out the reputation of the loan originator and strive to speak with those who have their loans through them. Reputations are hard to cover, and it is advisable to know how your potential lender handles business.
Avoid interest only type loans. By having an interest only loan, the borrower only covers the interest around the loan along with the principal never decreases. This particular loan might appear to be a smart choice however, after the loan a balloon payment is essential. This payment may be the entire principal from the loan.
Make sure to be totally candid when seeking a mortgage loan. Inaccurate information, whether intentional or unintentional, can result in a denial of your respective loan. A lender won't trust you if they learn you've lied directly to them.
Don't forget to calculate closing costs when obtaining a home financing, particularly if this is the first time. Above and beyond the downpayment, numerous charges exist simply for processing the borrowed funds, and lots of are caught unawares through this. You ought to anticipate paying up to four percent of the mortgage value as a whole closing costs.
Ask plenty of questions of your mortgage company you plan to utilize. The financial institution should answer the questions you have clearly, without getting vague. You understand it's time to search for a brand new mortgage lender to work with if your lender dodges your questions or refuses to offer a straight answer.
Some creditors fail to notify credit rating companies you have paid back a delinquent balance. Since your credit rating can prevent you from getting a mortgage, ensure all the information on your own report is accurate. You may be able to improve your score by updating the information on your report.
For those who have lower than stellar credit, it could be very beneficial for you to spend less money toward your downpayment. It is common for people to save lots of between five and three percent, but you should aim for around twenty if you wish to increase your chances of being approved.
Remember that we now have always closing costs and a payment in advance connected with a mortgage loan. Closing costs could possibly be about three or four percent of the cost of the property you choose. Make sure you establish a savings fund and account it well which means you have the ability to cover your down payment and closing costs comfortably.
Contact your credit bureau if you find incorrect information on your credit file. There are many cases of id theft happening annually. Because of this, most credit bureaus have risk managers which may have experience dealing using this type of thing. Also, the credit bureau can mark your credit report as one containing had their identity stolen.
Don't use real-estate brokers or mortgage lenders who encourage you to definitely lie on the mortgage loan application. It is actually illegal to lie with this application, which is a legitimate document. Misrepresenting your revenue or some other facts are grounds for criminal prosecution. Working together with individuals who encourage you need to do commit a criminal offense is a bad idea.
Keep the mortgage documents safe. A home loan is a big expense along with the only legal proof you have will be the actual documents. Make multiple copies for your self while keeping them in separate safe places. You will certainly be ready if you should must produce those papers at all.
Before making it official, ask for a good faith estimate from the total price of your home mortgage. The GFE should show you the fees linked to the closing of your mortgage, combined with the ongoing cost associated every month. Federal law requires this through the lender, so ensure they give it for you.
It isn't entirely possible that everyone, even though getting a home is a very common goal of many. This doesn't have to be the outcome. In fact, making use of this advice, you ought to be better prepared to obtain the home you want.