Real Estate 101: 3 Ways To Help Your Clients Qualify for a Home Loan

Many real estate agents don’t realize that they can help their clients qualify for a mortgage. You may not be able to magically raise their credit score or approve them for a higher figure, but you have the power to educate and empower them so that they make informed decisions. This is especially beneficial if you happen to be wholesaling properties and looking for buyers. How much do wholesalers make if they help their buyer qualify for a home loan? Assisting a client with their mortgage won’t earn you an additional commission, but it will help you build your client list, and a longer client list can translate to bigger income.

What Is a Home Loan?

The terms “home loan” and “mortgage” are often treated as synonyms, and they are indeed interchangeable in most contexts. Some people may differentiate between the two terms, however, by specifying that a mortgage is a loan for a home that you already own. A home loan, on the other hand, is a loan that’s extended to build or buy a new home. A skilled real estate agent should be able to help a client secure whatever funding they need to buy an owner motivated distressed property — or another property that’s eligible for a loan.

To help your buyer qualify for a loan, the first step an agent should take is educating their clients about available options. Though a distressed property may be a great bargain, some homes are not eligible for traditional financing due to their condition. You should discuss alternatives — such as mortgages tailored to investment properties — or explore other homes with them in order to ensure your client finds the best property for their needs. Equipping your client with knowledge is every realtor’s responsibility.

What Your Client Needs to Know About Home Loans

Second, you should determine where exactly your client’s knowledge about home loans lies. Are they experts who have done hours and hours of research — or are they newbies who are relying on you for all of their information? If they fall into the latter category, you must encourage them to take the initiative on home loan research. Remind them that certain properties, such as those found on a pre foreclosure list, may not be compatible with the mortgage they’ve chosen. In order to maximize their available options, encourage them to look into every kind of home loan that may be available.

Finally, the third step to helping your clients is setting realistic expectations. Real estate agents who validate fantasies and dreams are not doing their clients any favors. You can certainly encourage your buyers to be optimistic — but remind them that their hopes are just that — optimism. When a client is approved for a mortgage, they may wonder if another lender will approve them for more. Be honest about what they should expect. Similarly, they might wonder if their budget will buy them a mansion. Honesty is key when it comes to funding.