They say you live and you learn, and sometimes this feels especially true for mortgage brokers! I try to always use my past experiences to improve future transactions with my buyers and avoid annoying obstacles.
Credit Scores vs. Paying Points
Did you know that raising your credit score might be the wrong choice? Though it sounds like the right call, paying off your debt to raise your credit score could be a big mistake; it could even cost you more money in the end. Here’s why.
People generally think that the higher their credit score is, the lower the interest rate and closing costs will be. I’ve known plenty of clients who want to pay off existing debt in an attempt to boost scores, and I often have to tell them that it’s not always the best use of their money.
Instead, if your scores aren’t ideal, you can run a simulator to see what it would cost rather than paying points to lower the rate. An even better solution might be to start early and find out what the best plan of action is long-term; more time to plan means you can take less drastic measures.
Mortgages are never one size fits all. You deserve to have personalized advice on what works right for you.
It’s Not Business, It’s Personal
Let me tell you about the one time a client made me cry. As a woman in finance, I feel like I’ve heard it all, so not much shocks me anymore – but what they said in this case wasn’t even particularly mean.
Early in my career, I was working on a difficult file. It was challenging, but we were getting it done. The client didn’t understand why we needed certain documents or why this or that “thing” was happening. He was frustrated, but it’s my job to explain what’s going on and keep the buyer updated. Even so, he wasn’t having it.
I was sitting on my couch, talking on the phone with him one evening, and I said, “I promise to get you approved so you can get your house.” He responded simply, “You don’t care.”
That one line is what made me cry – I get very invested in each of my clients, and I felt misunderstood, almost like my work was fruitless. And, the truth is, I care very much. I ended up getting the loan closed, but it was a discouraging moment.
So, why am I telling you this? Because when it comes to my clients, it’s not business; it’s personal.
Tell The Truth
You know when you go to the dentist and your hygienist asks if you floss daily? Of course, you say “yes,” but as you’re getting your cleaning, you know (and they know) that you’re fibbing, not flossing! Working with a lender is a little like this.
Most issues come up when my clients don’t tell the whole truth. The thing is, we’re going to find out anyway. We need to know about where money is coming from, any new debts, and/or past credit issues. The process is simple; we want to help, so you need to tell us everything.
Remember, if you don’t get the loan, we don’t get paid, so we’re invested in your success no matter what. Of course, the more we know, the better – we can help you get ahead!
Honesty is the best policy, because solving these issues once under contract is always much more painful.