Buying a house is a transaction that’s often shrouded in mystery, with surprises at every turn. For lenders and buyers, the roller coaster that has been the housing market only heightens the need for speed and accuracy. And when time is of the essence, creating a solid partnership between all parties is essential.
As in many milestone-related transactions, emotions can run high when pursuing homeownership. But one thing is certain: knowledge is power. Help your borrowers be in the best possible position by demystifying the path toward loan approval. Together, you’ll navigate the lending process with less stress and a result you all want: happy new homeowners.
It’s easy to get swept up in the excitement of homebuying, especially with so much information available to borrowers. But before your buyers fall in love with a new home, make sure that it’s within reach. Interview borrowers to learn more about their situation, what kind of home they’re looking for, and their current financial obligations.
Frequently, borrowers establish expectations about home features before price. And with varying costs of taxes, insurance, and other escrow expenses, the loan approval amount can change. Help your borrowers avoid housing heartbreak by confirming how much of a loan they can manage. Use your expertise to help them understand the specifics of their target locations and home types that influence monthly costs. This smart step can help them focus their shopping parameters, which can improve their odds of submitting the winning bid.
To get started, they’ll need to submit paperwork to confirm what amount they can afford. But this process is often one of the most challenging to complete. With varying processes with employers, coordinating with human resources can quickly erode your timeline. Implement tools that can help you conduct income verification without the hassle. By streamlining the process, you can get accurate data back and an approval letter in the hands of your borrowers.
Generally, the list of documents your borrowers will need to provide is standard. Create a checklist for prospective borrowers to reference before you start pulling reports. Provide a robust list of needed documents through your sales automation or post it on your website for easy access. Putting this information out there proactively can help potential clients better understand the process and establish your expertise.
All borrowers will need to submit their government-issued identification as well as access to specific data. Some items can be provided directly from the borrower, like bank statements and W2s, while others must be obtained by the lender. Some institutions require tax return summary pages while others prefer the tax transcripts provided directly from the Internal Revenue Service. Get approval to initiate a soft pull on the borrower’s credit report, to confirm their credit score is within range.
Centralize how your borrower will send this information, keeping in mind the security needed. Use a secure login for a file-sharing site or use your company-provided interface. Make sure your borrowers understand the cybersecurity risk associated with emailing certain documents, especially as they’re pursuing a loan. The last thing they want to do is risk the security of their data.
Getting qualified borrowers’ loans approved is your job. But your borrowers are likely working hard at their job when you need to contact them. This can make for stretched-out timelines, lags in document coordination, and can negatively impact their closing date. To keep on schedule, set expectations with your clients on how and when you’ll need to reach them.
Learn about their specific needs and time constraints, so you can create a protocol that works for everyone. If your borrower is a teacher, he may not be able to check email or texts throughout the day. If she’s an executive, she may be able to ask her assistant to alert her of your messages right away. No matter the situation, aim to provide multiple communication options for your borrower.
Use tools to help you improve efficiency, like online document signing, file sharing portals, and text alerts. Be as flexible as you can. Provide a general timeline for when you expect documents to be submitted or signed and get their acknowledgment beforehand. When everyone understands what’s expected, you can work toward your mutual goal: an approved loan.
Understanding the rules can make even the most complex process manageable. And with a lending process playbook, your borrowers can get it right, even if it’s their first foray into lending. Put yourself in their shoes and document how they can get from where they are to where they want to be.
With your expertise, understanding, and dedication, your borrowers will look back on their lending experience with warmth, not stress. After borrowing with you, they’ll be likely to refer you to friends and family. When it’s time for their next home, you’re sure to be their first call. And if you’re lucky, they may have your checklist complete, making your job easier and their dreams within reach.