Robert's Blog

How good is your approval letter?

The pre-qual letter is only as good as the Loan Officer and the experience of your L.O.

If Your LO has experience and knows what questions to ask, and what answers should cause him to ask more questions... Then a Pre-qual can be as good as gold.

Unfortunately in today's environment there are MANY LOs that do not know how to qualify because of the type of products we had just months ago that just do not exist any more. Let's face it, the past 5-7 years built up a batch of folks in our business that may not have the right skill set for today's Real Estate world.

I know that when I talk to some one, I don't always have to see their "stuff" up front.  I know the right questions to ask up front. I will often have people read off the information from their stubs, walk them through the appropriate line items of a Schedule C on a tax return which is just as good as me having the documents in front of me. Double checking the YTD income on a Pay Stub, the actual salary, and averaging the past years income is necessary in many cases. As soon as you find out that people are Self employed or 1099 income you CAN NOT issue anything based on what they say, UNLESS they read it off of the tax return. No one that is self employed with a Schedule C remembers what they actually declare and it needs to be confirmed.

Here is where some one that is not familiar with the fact that there is a "T" in the word Mortgage could stumble a bit!

One other note on Pre-Approvals, Pre Qualifications: another important step in today's world is a "RE-Qualification". Guide lines have changed frequently in the past year. You need to make sure you are still qualified if you have not spoken to a lender in the recent couple of months, double check your qualifications.

Be sure that you have a trusted lender partner prior to shopping for a home. Make sure they do a thorough needs analysis and that they ask you the right questions to be sure that your pre approval is not only accurate, but that all your needs are considered and met.

I wish you the best in your house hunt!

Rob

Robert Rauf

WWW.RobertRaufHomeLoans.com

(732)740-0175

How good is your approval letter?

The pre-qual letter is only as good as the Loan Officer and the experience of the L.O.

If Your LO has experience and knows what questions to ask, and what answers should cause him to ask more questions... Then a Pre-qual can be as good as gold.

Unfortunately in today's environment there are MANY LOs that do not know how to qualify because of the type of products we had just months ago that just do not exist any more. Let's face it, the past 5-7 years built up a batch of folks in both sides of our business that may not have the right skill set for today's Real Estate world.

I know that when I talk to some one, I don't always have to see their "stuff" up front.  I know the right questions to ask up front. I will often have people read off the information from their stubs, walk them through the appropriate line items of a Schedule C on a tax return which is just as good as me having the documents in front of me. Double checking the YTD income on a Pay Stub, the actual salary, and averaging the past years income is necessary in many cases. As soon as you find out that people are Self employed or 1099 income you CAN NOT issue anything based on what they say, UNLESS they read it off of the tax return. No one that is self employed with a Schedule C remembers what they actually declare and it needs to be confirmed.

Here is where some one that is not familiar with the fact that there is a "T" in the word Mortgage could stumble a bit!

This is the reason that NOW, more than ever, you need to work on relationships with your trusted Lender PARTNER, not just any one with a business card that says "mortgage" on it.

One other note on Pre-Approvals, Pre Qualifications: another important step in today's world is a "RE-Qualification". Guide lines have changed frequently in the past year. You need to make sure your buyers are still qualified if they have not spoken to a lender in the recent couple of months.

This business is about relationships that go beyond the client.  You need to have relationships with your trusted partners; Lenders, Title companies, inspectors etc...  Your TRUSTED PARTNERS are part of your team and help you close deals efficiently, painlessly and with happy clients.

Have a great Weekend!

Rob

Robert Rauf

www.RobertRaufHomeloans.com

Mortgage rates jumped last week to the highest levels we have seen in quite some time.  There were a few reasons for the sell off in the markets... You can blame things partially on the price of oil which has caused a fear of inflation, but the biggest reason was a few comments from the Federal Reserve. Luckily the FED came out and said "hold on a minute, that's not what we meant!" and the market calmed down quite a bit and rates settled back down significantly this week.

We probaby saw close to a 1/2% improvement this week vs the highs of the previous week, So it was definately a Good News week!

Just in time for the weekend to keep our buyers happy!

Have a great weekend!

Rob

Robert Rauf

WWW.RobertRaufHomeLoans.com

(732)740-0175

In part one I discussed the basics of what most people are missing... They mostly forget to plan.  It is the biggest investment you will make, yet we often have people that seem to wake up one morning and say: "let's go buy a house" with out a clue as to what to expect!  If you did not read part one..... YOU SHOULD!

here is a link to Part 1: http://www.activerain.com/blogsview/558046/How-do-I-buy

Now for Part 2:

Part 2

OK, you are ready to buy!  Now what?

This may sound silly at first... But DON'T look at houses, not yet at least.

You need to go over your finances with a Mortgage professional first. The worst thing you can do is go out looking with out being qualified.

This is the information any ‘good' loan officer will need when you speak to them, whether it is on the phone or in person:

• Most Recent pay stub or 2, and the prior year's W2 for all jobs. (this will help clear up any income questions and give your Mortgage Guy a clear picture of your TRUE income) They will need a 2 year history.
• Bank statements for all accounts. (checking, Savings, retirement etc) Your lender needs to know what money you have to work with and help you structure the deal. There are  not a lot of "no money down" programs available these days, so be prepared to put a small down payment.  The more money you have the easier it is to be approved, even if you are not using the money for the purchase. Reserve funds are also a big piece of an approval.
• Tell your Mortgage Guy EVERYTHING, it is their job to be the filter to help make sure that everything is put together properly for you.
• Credit Report:  This is a necessary evil to see what you can or can not do. Not only will a credit report give your lender Credit scores, it will also show payments and balances on your Credit accounts and payment history.

After a conversation with your trusted lender and a needs analysis for what will fit you best you are ready to go shopping! This conversation should include what your goals are, what a comfortable monthly payment will be along with what you actually qualify.

There may be another step in between here, but a good Mortgage person will also help keep you on track to buy even if you are not 100% ready to buy now.

 Now you can look at houses!   (look for Part 3 and Part 4 Coming soon!)

If you have any questions, please do not hesitate to contact me!

Rob

Robert Rauf

WWW.RobertRaufHomeloans.com

(732)740-0175

First time buyers "How-To" Guide. (part 1)

Are you confused with the process of buying a home?  Don't be, it is not your fault!  Unfortunately the educational system misses out on teaching us how to buy and what to expect in the process. Heck, many schools do not even teach the basics of a bank account these days! The other problem is that your parents are not necessarily the best source for information.  Things change frequently in the Real Estate world, and you need to find a professional that you can trust.

The First step should take place as soon as you get a job and begin to build credit, long before you buy a home.

The first thing you should do is:

• Get a job.  Sounds simple enough, but you would not believe how many people think they can buy with out one!

Once you have the job:

• PAY YOUR SELF FIRST!  Take a piece of your check and put it into a savings account on a regular basis. Don't try to keep up with your friends spending habits. It will only hurt you in the long run.
• Put your savings in the BANK!   You would be surprised how many people still have a shoebox full of cash.  Be smart, put your money in the bank, it is hard to verify cash, and it makes you look bad when you can not show your savings.

Don't live beyond your means!

• Use your credit cards like cash, with the intent to pay them off at the end of the month Credit card balances Will Lower your credit scores. So never let the balance go above 20% of the limit. (your available credit is about 30% of your credit score) NEVER carry a balance.
• Pay your bills ON TIME: Another simple issue and a common sense one. But many people make that mistake when they are young. If you cant afford it, DON'T buy it!
• Don't buy a new car. A $500 car payment is the equivalent of an $83,000 mortgage. (frugal will help you here, think baby steps, no need to have a Cadillac or a Mercedes right away, you cant live in it!)
• Best way to build credit and a high score will be a few credit cards. My advice is to use them once a month and pay them off the day the bill comes in. That way you will pay $0 interest, and should not have any issue with the balance getting out of hand. Just be cautious of the limit, keep the balance (even if you plan to pay it off) FAR away from the limit.

Think about where you will be comfortable with a monthly payment.  This is important since it is YOU that will have to write out the check every month!  Keep in mind that a home is one of the best investments you can make.  There are significant tax advantages to owning a home that make it much more affordable than renting.  Because of the Tax advantage and other benefits you can actually afford a much higher mortgage payment than rent payment.

As you can see, You can not just wake up and say... "I am going to buy a house"  it is something you need to plan for!

Repetition works. Repetition works. 

We all know that a key part of prospecting is asking your current clients for referrals. But when do you ask? Consider boosting your chances by asking for referrals at:

•Ø     Contract Signing (make it an optional form at signing)

•Ø     Throughout the buying selling process (Include the referral conversation in general customer communications even in E-mails, when appropriate)

•Ø     At Closing (give clients an easy to complete and return form to take with them after you leave the closing table.)

•Ø     One month after closing (You will want to give clients a call anyway to make sure they're happy in their new home.)

•Ø     Four months after closing (a quick e-mail is a simple way to achieve this.)

•Ø     Eight months after closing (A more formal letter may be a good method at this point in your relationship)

•Ø     One year after the closing (you can tie your referral call here to celebrating the anniversary of the closing and checking in to see if all is still ok with your clients and their home.)

Dont forget to work your Sphere!

Rob

Robert Rauf

WWW.RobertRaufHomeLoans.com

(732)740-0175

Defeating Customer Skepticism

Advertisers' daily assaults have left some potential customers with a high degree of skepticism. Win over doubting customers by implementing the following tips:

Don't deliver a canned sales pitch. Building rapport creates a connection of trust and honesty with customers. Use open-ended questions to get close to customers. After a few minutes of conversation to create empathy with your client, focus your discussion on customer needs and beliefs.

Understand your offerings. Nothing makes customers more leery than agents who don't comprehend their own properties. Know how property benefits will appeal to customers' unique needs. Be prepared to share a testimonial from another customer who had the same needs. Knowing your properties makes you an authority, and when you show clients that you are an expert, they will be more receptive.

Show integrity at all times. Many customers have grown skeptical from disappointing sales and service experiences. However, your integrity will signal customers to give you a chance. Remember, any breach of trust or an ounce of doubt can blow the sale.

Don't take it personally. Skepticism isn't personal. Accept it as a common defense in response to unfulfilled claims or promises. By building rapport, conveying sound property knowledge and being honest, you're well on your way to defeating skepticism and making the sale.

Have a great week!

Rob

Robert Rauf

WWW.RobertRaufHomeloans.com

(732)740-0175

When Was Your Buyer Last Qualified?

In today's ever evolving world of mortgage guidelines it is important to be sure the buyer you are putting in the car this weekend is still able to get a loan.

In the past year I have seen more guideline changes than I have seen in the past 20 years. It is hard for us "mortgage guys/gals" to keep up.

I spent quite a bit of time speaking with a broker of a Century 21 in my area yesterday.  He has had transactions falling apart because of a domino a few deals deep not falling. Frustrating for sure, but avoidable if everyone does their jobs correctly: All of the dead deals were stemming from denials that were once approvals.

Your Loan Officer ‘Partner' needs to stay on top of things. As guidelines change qualifications change, or go away entirely. The same can be true for a loan that is in process.  Typically we will get a notice of guideline changes that give us a short window to lock in guidelines for loans that are In Process, if you do not lock in the old guidelines you will be subject to the new guidelines and approvals may vanish.  This is where the lazy, inexperienced or Part Time Lender is going to have deals blow up. 

I had another agent that called me on Monday with a client that just wrote contracts over the weekend.  She needed a pre approval to submit the contract.  I spoke with the buyer and on the surface all was good, until I ran credit. He had been "approved" by another lender 6 months before... (How I haven't a clue, because even when we were doing the Dumb Loans we could not have gotten him approved.)

This past weekend was 100+ degree weather, and she was running someone around that could not buy.  Be sure to contact your trusted lender PARTNER to double check your clients prior to putting them in your car.  We can weed out the good from the bad in a few minutes for you and will be happy to do so.  The more productive we can make you the better!

• Double check all your clients Pre-Qualifications
• Work Closely with a trusted Mortgage Guy or Gal
• Get your clients Qualified prior to putting them in your car!

Unfortunately there are many people in my end of the business that do not know how to qualify, because they never needed to qualify buyers in the past, Those days are gone and your lender partner needs to know the basics; He needs to know how to spell FHA, How to read a tax return, how to calculate income, what to look for on a bank statement, what to put on an application and what NOT to put on it.  Your transaction, your reputation and your commission is riding on their abilities, be sure your partner has the necessary knowledge. It is not about the box of donuts, it is about your client.

Have a great week!

Rob

Robert Rauf

Countrywide Bank FSB

WWW.RobertRaufHomeloans.com

Robert_Rauf@countrywide.com

(732)740-0175

Why should I buy a home now?

I firmly believe that we will all look back on 2008 and say "I wish I got that house back in 2008!" 

It is truly a buyers market.

• More inventory than we have seen in years... So Many choices for buyers.
• Interest rates are at very affordable levels
• Sellers are becoming more willing to negotiate
• Lower prices than we have seen in years
• The median price of homes in Monmouth and Ocean counties is no longer falling

What if you have a home to sell?

Worried about losing money on the sale of your home?  You have to take into account the money you will save when you buy your new home.

Here are some completely contrived numbers to illustrate the example:

If your home was "worth"  $225,000 in 2004 and you have to sell it for closer to $200,000.  In your mind you feel like you are losing $25,000. That is NOT the case.  First off, Hind site is 20/20, and you can  kick yourself for not selling at the high forever, no one has a crystal ball!

You pick up much more when you move up to your next home.  If the home you want to buy is $300,000 and the numbers work out in a similar fashion to the above number, you effectively buy your next house at a $37,500 discount.  So in one scenario you see yourself as losing $25,000 but on the other you save $37,500... Thus realizing a $12,500 gain by buying the more expensive house at a discount...

So NOW is a great opportunity to buy.

If you plan to keep the house for the long run, I doubt you can go wrong.

Have a great week,

 Rob

Robert Rauf

www.RobertRaufHomeLoans.com

(732)740-0175

Building Financial Security One Homeowner At A Time.

Why should I buy a home now?

I firmly believe that we will all look back on 2008 and say "I wish I got that house back in 2008!" 

It is truly a buyers market.

• More inventory than we have seen in years... So Many choices for buyers.
• Interest rates are at very affordable levels
• Sellers are becoming more willing to negotiate
• Lower prices than we have seen in years
• The median price of homes in Monmouth and Ocean counties is no longer falling

What if you have a home to sell?

Worried about losing money on the sale of your home?  You have to take into account the money you will save when you buy your new home.

Here are some completely contrived numbers to illustrate the example:

If your home was "worth"  $225,000 in 2004 and you have to sell it for closer to $200,000.  In your mind you feel like you are losing $25,000. That is NOT the case.  First off, Hind site is 20/20, and you can  kick yourself for not selling at the high forever, no one has a crystal ball!

You pick up much more when you move up to your next home.  If the home you want to buy is $300,000 and the numbers work out in a similar fashion to the above number, you effectively buy your next house at a $37,500 discount.  So in one scenario you see yourself as losing $25,000 but on the other you save $37,500... Thus realizing a $12,500 gain by buying the more expensive house at a discount...

So NOW is a great opportunity to buy.

If you plan to keep the house for the long run, I doubt you can go wrong.

Have a great week,

 Rob

Robert Rauf

www.RobertRaufHomeLoans.com

(732)740-0175

Building Financial Security One Homeowner At A Time.