Want Answers to Your Questions?

The process of buying a home can be overwhelming, even daunting, for clients and that’s where you come in! They will likely have many questions and depend on your support throughout the process to help them make the best financial decisions for the purchase of their home.

As an independent Mortgage Loan Officer, you are an important resource for homebuyers regarding any questions about financing a home throughout the loan process - before, during, and even after the loan term.

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Top 5 Most Asked Questions Answered!

We have compiled a list of the top 5 questions borrowers have, which you will likely be asked as a mortgage loan officer.

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1. How to get pre-qualified for a mortgage loan?

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While pre-qualification for a mortgage loan is simple, there is a difference between pre-qualification and pre-approval and it’s important your client knows the distinction.

Pre-qualification is basically a rough estimate on how much of a mortgage loan your client qualifies for based on the snapshot of their financial health.

This is determined by general income information, credit check, basic information about bank accounts, the amount of their down payment, and what a good monthly mortgage payment would be for them.

Pre-approval comes after the client completes the mortgage application. This step requires another credit check, copies of income statements, bank account numbers, W-2 statements, their desired down payment, and desired monthly mortgage payment.

All of this information is then verified and approved. Once approved, you give the client a pre-approval letter which they then use when submitting a bid on a house.

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2. Is there anything to avoid doing when looking to purchase a home?

Up until closing, lenders are required to pull a fresh credit report to make sure there have been no new debts or changes to the client’s financial situation.

Because of this, buyers should avoid applying for new credit cards, any large purchases, or paying off all their debt, which could have a negative impact on their credit score.

This information should of course be discussed with your client even if they don’t ask about it.

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3. How much will the down payment be?

While many prospective homebuyers think the down payment will be about 20%, this is not always the case.

Depending on their situation, some borrowers might even qualify for a down payment as low as 3%. Of course, there are benefits and disadvantages to a lower or higher down payment so make sure to discuss these pros and cons with the client so they know all their options.  
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4. Do I need mortgage insurance?

In the case of a borrower defaulting on a mortgage loan, mortgage insurance will protect the lender. If a borrower has a down payment less than 20% this is usually required.

This can change when they build more than 20% equity on their home but until then, they will be required to pay for mortgage insurance every month.
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5. How much are closing costs?

Buying a home has various fees and closing costs involve pre-paid interest, fees for documentation, lawyer fees, and more.

Usually closing costs amount to 2 to 5% of the home purchase price but it will be different with each client. Make sure to look into their unique situation to see what your client’s closing costs will be so they are not surprised when it comes.

These closing costs will be included in the closing disclosure as a breakdown summary and is provided approximately 3 days before closing.

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There you have it, these are the top five questions borrowers have for mortgage officers. While these may be obvious to those of us in the industry, the lay person will usually not be aware of these concepts.

It’s important to be a solid resource for them and guide them through the process with patience and empathy. Being a great resource will benefit you by having happy clients, which can lead to more referrals and better business overall!

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