Category: Lending

The homebuying process can be an overwhelming ride for buyers, particularly first-timers. Add in the aspect of understanding credit scores and your clients can become even more perplexed. While most homebuyers will require a loan, a fundamental step in acquiring that loan will be an adequate credit score.

This blog breaks down four ways you can make the credit score topic more understandable to your clients.

#1. Understand Your Buyers

One of the crucial first steps is to create dialogue with your clients on their understanding of credit. Start this off by asking some general questions, as it’ll set the stage for clearing any confusion. Do they have any student loan debt? Do they know what their credit score is? Have they owned a property before? Knowing where your clients are financially and their knowledge level will help you to tailor the information you give them in a more relevant manner during the buying process.

#2. Avoid Technical Language

In your daily life as an agent you may use terminology that the average non-agent individual may have no clue on. Using terms like LLPAs, PITI and loan-to-value won’t impress your audience, it’ll just add complexity. Financial jargon may be useful when it comes down to understanding the paperwork, but creating explanations that your clients will understand is key in keeping focus.

#3. Explain the Typical Timeline

Walk buyers through the entire process, from the purchase and credit line decisions that could impact their credit score to prequalification and preapproval to the process of applying for a mortgage. Many don’t understand the process after they’re approved but before they close. This time period is critical in terms of keeping the financial of the deal intact, so don’t end the timeline prematurely.

#4. Utilize Visual Aids

Many people are visual learners and they understand topics better if they can see what they’re trying to comprehend for the first time. Touch base with lenders and mortgage brokers that you frequently work with and ask if they have infographics or charts that’ll help breakdown the complex loan process visually.

#5. Bring It All Together

The process of homebuying has many complex stages. From perfecting the home search for your clients to walking them through the mortgage process, credit scores are another area that can cause confusion. Utilizing the five ways explained in this blog can create a simpler and better understanding of credit scores. To learn more about guiding your clients through these processes, begin your seven-day free trial of AgentEDU and gain access to our fundamental “Representing Buyers” video course.

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AgentEDU® is a platform where agents at every level can come to watch 10-minute video courses for the many situations that successful agents must master. From essential to advanced level and everything in between, AgentEDU® courses help agents become top producers with increased earnings and a plan for continued growth. For a 7-day free trial sign up here.

AgentEDU® is an Agent Publishing brand. For nearly two decades, Agent Publishing has been committed to providing residential real estate professionals with the information and training required to build successful and meaningful careers in their local markets. Agent Publishing’s influence extends to every career stage and reaches agents across print, digital, events and online learning.

Mortgage rates are a factor for both buyers and sellers, which means agents need to be aware of what they’re doing on any given week. However, focusing too much on what economists or the news media say can throw you off track.

This blog explains the impact that lower mortgage rates have in fueling housing market optimism.

Solid Ground

One of the factors of there being such optimism for the 2019 year in regard to the market is the fact that mortgage rates are at their lowest levels in 10 months. This comes even as many economists and mortgage lenders were warning of higher interest rates in 2019.

Spring Buying Gets a Push

With the recent downtrend in rates and extra inventory opening up, the spring homebuying market will have an extra push. Freddie Mac Chief Economist Sam Khater stated that “the U.S. economy remains on solid ground, inflation is contained and the threat of higher short-term rates is fading from view, which has allowed mortgage rates to drift down.”

Mortgage Rates Are Stable

Mortgage rates stood at an average APR of 4.41 percent on the standard 30-year fixed-rate loan, just 0.09 above last years’ levels, according to a February report by Freddie Mac.

Consumer Bargaining Power is High

Khater goes on to mention that today’s buyers have a larger selection of homes on the market as well as more consumer bargaining power than they’ve had in the last few years. Couple that with these low mortgage rates and there could be an early rally for the spring housing market.

Economists Eye the Fed

A key component in the market is what actions the Federal Reserve will make. In late 2018 there were signs that the Fed was going to continue raising rates, and some economists estimated at least three rate increases for 2019.

However, economic data gave Fed chair Jerome Powell cause to rethink that idea. Now a recent survey of economists done by the Wall Street Journal shows that most don’t expect a rate hike before June.

Furthermore, most economist agree that there will likely only one more rate hike, probably in late 2019. This will effectively keep borrowing costs much lower than previously anticipated through 2019 and 2020.

Borrowing costs hinge on forward-looking indicators such as Fed meeting minutes and the consensus of economists, so reduced expectations on rate hikes for 2019 may keep mortgages more affordable for the first half of the year. However, there is a good deal of uncertainty baked into every economic forecast, so even expert consensus may not be a reality.

Keeping Focus

Given the uncertainty, it’s key to be a levelheaded. It’s never a good idea to rely 100 percent on what an economist says MAY happen in the future is a good move. Being informed but also taking the information given with a grain of salt will put you more at ease and allow you to properly respond to the housing market.

 The real estate market has many indicators to look at and factors that play a role. Being in the know and taking note of the trends is key in planning the road ahead. For more valuable tips and tactics on mortgage rates check out our AgentEDU course dedicated to Mortgage rates. You can start with a seven-day free trial and gain access to the “Real Estate Mortgage Basics” course.

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AgentEDU® is a platform where agents at every level can come to watch 10-minute video courses for the many situations that successful agents must master. From essential to advanced level and everything in between, AgentEDU® courses help agents become top producers with increased earnings and a plan for continued growth. For a 7-day free trial sign up here.

AgentEDU® is an Agent Publishing brand. For nearly two decades, Agent Publishing has been committed to providing residential real estate professionals with the information and training required to build successful and meaningful careers in their local markets. Agent Publishing’s influence extends to every career stage and reaches agents across print, digital, events and online learning.