First Time Home Buyers Can Be Approved For A Loan With Proper Planning
First you have a client who for the most part does not understand anything with regard to buying a home. They have no understanding of the market place or any aspects of the loan process. Not only is it important to help them find a home or get approved for a loan, but as well, advise them in their decision with regard to location as it pertains to potential gain in equity as well as understanding the different types of loans that are available and what the long and short term financial affects of these loans are.
In a lot of cases this buyers will be limited to certain loan programs as well as the type of home they can afford. Many of this buyers may also have issues with credit since they are either just establishing their credit or have not bought a home do to credit issues and have rented for a number of years thinking they could never be approved.
Many of the first time home buyers I work with fall in the latter category. This is a huge market place. Even in slow times there are a lot of people who just don't believe they will ever qualify for a home, so first time home buyers that have some credit issues can be a good source of business. Most of the time it is a simple process of reviewing the credit report and making some corrections to elevate the credit scores. I have found that these types of buyers are also extremely grateful once you help them achieve the goal of owning a home and in most cases can be your greatest source of referrals. My experience as a certified instructor in credit restoration for Central Michigan University in 2002 has proven to be a valuable tool in working with credit challenged clients and rising scores 50 to 100 points in 30 to 60 days.
When working with a 1st time home buyer it is important to educate them in all aspects of buying a home. The goal for the first time home buyer should be to continually improve their equity position as well as their personal asset accumulation. I have worked with many first time home buyers that went from their first loan being a two year fixed sub prime loan to a conforming best rate situation after the 2nd year due to continued mentoring of that client. With a first time home buyer our job never ends. We must continue to provide them with education on credit, budgeting and resources for establishing investment accounts, anything that will help them grow personally and financially.
My procedure for functioning with a first time home buyer also offers an exit strategy which will occur 2 to 3 years (2 years if sub-prime) after the loan is completed. At that time frame the customer is generally inside a better position as far as the kind of loan they can qualify for and now can truly begin to take advantage of the numerous various strategies for creating wealth thru correct management of their house equity and mortgage.
In closing, if you have opportunity to work with first time home buyers understand that they have special needs and they deserve our undivided attend. For them this is the start of a life long journey and you as a mortgage lender or real estate agent have the ability to create a successful client whose loyalty will be proportionate to your efforts to help them be successful.
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