It can be awkward asking questions or making suggestions to your buyers about their financing, but it’s important for you and your buyer to make sure the lender chosen offers the best options and the smoothest path to closing. Here are a few friendly questions you can ask your buyers to help them receiving the best financing option possible and make sure they’re working with a lender who is going to close the transaction smoothly and on time.
“Does your lender offer the MCC?”
If your client is a first time homebuyer, this is the first question we recommend asking. Simply put, the MCC is too good to pass up and isn’t offered by most lenders in our market. For most buyers, the MCC essentially increases their tax refund by a full $2,000 every year they own the home. Your buyer will be thrilled with you if you help them find a lender who offers the MCC.
“Are you receiving a fixed rate?”
This is especially relevant to ask if your buyer is purchasing a condo unit, but you’d be surprised how often buyers either don’t know whether their rate is fixed or adjustable, or their lender switches them from a fixed to an adjustable rate because they’re having “trouble” with the financing.
“Are you eligible for a VA loan?”
If the answer is yes, then VA is almost certainly going to be the best financing option for your buyer. Encourage them to speak with a lender with experience and confidence originating VA loans who won’t make excuses to shy away from the program due to lack of knowledge.
“Did your lender mention the Rural Development loan”
If your buyer is looking anywhere outside Iowa City/Coralville and Cedar Rapids/Marion/Hiawatha and prefer 15% down payment or less, a lender should consider the RD loan as an option. North Liberty, Tiffin, Williamsburg, Tipton… the list of eligible communities is long! And if the lender makes the buyer ask about the program before they’d offer it, that’s a sign that it may not be the best place to consider this loan program.
“How long is the lock period on the interest rate you were quoted?”
A buyer’s rate can be locked once they have an accepted offer and are within 60 days of closing. You may see other lenders advertising interest rates online. Please keep in mind these are sometimes “teaser” rates that are lower than the rate offered – the short lock period can’t be met, the loan amount is too low or the credit score isn’t above 760.
“Does your lender underwrite in-house?”
It’s no secret that we’re quite proud of our in-house underwriting. Lenders like RMN who underwrite in house are able to keep loans moving quicker and more efficiently, and are able to fully review your buyer’s file upfront to prevent surprises and problems from arising right before the financing deadline or closing date. We will never have a closing delay due to underwriting.
If you would like to learn more on talking to your buyers about their financing, don't hesitate to reach out! We'd love to get together and discuss home loan options.