December 4th, 2014 9:46 AM by Jackie A. Graves, President
According to the
latest J.D. Power 2014 U.S. Primary Mortgage Origination
Satisfaction Study, first-time homebuyers report challenges with
understanding the mortgage process and the options that are available to them.
It also suggests that lenders may be doing a poor job of educating and helping
borrowers navigate the loan process.
respondents purchasing a home, 58 percent were first-time home buyers, yet only
29 percent of homebuyers in the last three months were first-timers, according
to the National Association of REALTORS®. The percentage of
first-time homebuyers has been less that 30 percent for 17 of the past 18
months. The reason the number is significant is that it's well below the
long-term average of 40 percent.
Nearly half (48
percent) of first-timers headed to a brick and mortar lender to meet with a
loan representative and receive personalized advice, yet even then, 43 percent
reported that they did not completely understand the process. And only 41
percent of first-timers said their loan officer completely explained the types
of loans, terms, special programs, fees and options to reduce their down
more transparency in the process, but transparency works both ways. Lack of
experience and uncertainty about the process may keep first-timers from asking
the right questions that could result in the right loan. Buyers may also be
reluctant to share key financial information that could help the lender provide
For all these
reasons, you should assume that your chances of getting a loan are better than
you think, but only if you're willing to do two things -- ask questions and
Here are some
suggestions to help you:
1. Look for a
lender who is willing to take time with you. Be upfront that you're a
first-time buyer and that you want to understand the process better. If you
don't know a good lender, ask for referrals from people you know who have
recently purchased a home.
2. Be willing to
provide basic information your lender needs -- income, debts and obligations
such as child support or student loan.
3. Share your plans
and dreams. If you want to flip the home in two years, say so. If you want to
live in it for 10 years, say so. It will make a difference in the type of loan
your lender recommends.
4. Come clean about
any problems you think you may have getting a loan. If you weren't so great at
paying bills while you were in school, you may have hurt your credit rating.
Tell the lender that you may have possible derrogatories and what you've done
to repair the damage.
5. Be flexible
about your goals and don't try to get a loan that's beyond your means. You'll
build equity and wealth much more quickly if you buy a home you can comfortably
By Blanche Evans | To view the original article click here