The unintended consequences of these regulations have made obtaining a loan extremely difficult for people who have any blemishes on their credit or don’t have a sizable down payment saved up. However, it’s possible that regulators may soon loosen the requirements, giving more potential homebuyers a better chance of qualifying for and obtaining a home loan.
Banks and other lenders have certainly made great strides in ensuring that they’re not handing out mortgages to people who don’t have the creditworthiness or ability to afford them—and that’s a good thing. But when lending standards become too restrictive, it can impede housing’s recovery and cause more harm than good.
As real estate professionals, it’s our responsibility to guide our clients throughout the process. The first step is to connect buyers with a trusted mortgage lender who will explain the nuts and bolts in detail and be able to show them the pros and cons of obtaining different types of loans.
If you’re working with buyers who don’t have a lot of money saved for a down payment and have a limited price range to work with, make sure you show them properties within their reach. Don’t encourage them to go for the trophy home. Counsel them that in today’s competitive market, time is critical, and buyers can’t waste any of it writing offers that won’t have a decent chance of being accepted by sellers.
