It’s difficult to process that the first third of summer is already past us. Of course, as a resident alien in the great state of Ohio, not only do we experience all four seasons of a standard Earth solar year, but we do so to the extreme. In other words, I’ve already had enough intense summer heat and am ready for the arrival of fall.
As much as I dislike the high summer temperatures, the current climate has provided the opportunity to partake in some great outdoor festivities, particularly picnics, parties and barbeques. Sure, I must don some very concealing outfits so I don’t frighten those unfamiliar with me, but what’s not to love about a good Hawaiian shirt – it’s lightweight, comfy and oh so stylish.
During one of these aforementioned events, I was making my way along the food table with a friend when we arrived at the most delicious array of fruits imaginable. I was so excited to partake in all the different varieties and the sweet nectars they offer, particularly the cantaloupe. It reminds me very much of a similar fruit at home on Amicitia which, roughly translated, is called a mantalope. These delicacies are thicker-skinned sweet fruits commonly found on water-rich planets.
But back to the party. My friend was equally excited to see and enjoy the wide variety of fruit offered; however, he paused and passed up on the grapefruit. I asked if it was too sour for him, and he said no – he couldn’t eat grapefruit because it doesn’t interact well with a medication he takes called a statin. Apparently, the two don’t play well together and can counteract one another, nullifying the effect of the medication.
The field of medicine is galaxies away from my knowledge base, so I left it at that. Later that night, however, I reflected on his situation, and as you probably already guessed, it made me think of homebuyers and some of the potential risks that could cause their homeownership pursuits to fall through. As credit union mortgage lenders and trusted home loan experts for your members, it’s our duty to educate and inform these homebuyers of these risks.
Once your member gets pre-qualified or, even better yet, pre-approved, there are some do’s and don’ts you should share with them:
- DO encourage a credit score checkup. As we know (but they may not), their credit score plays a big role in their mortgage rate. Make sure they check their score, pay down existing debt and correct any errors they find in their credit report.
- DO advise and assist them in creating and understanding their budget. This will help them know how much of a home they can comfortably afford, including monthly payments, taxes, insurance and other costs.
- DO recommend that they set savings goals. Help them start planning ahead for their down payment, closing costs and moving expenses so they’re ready when the perfect home comes along!
- DON’T tap into their savings accounts or reduce their current assets. A big part of their approval for a home loan depends on their previously stated savings and assets – a sharp decrease in these areas could affect the amount they’re eligible to borrow or even dash their hopes completely.
- DON’T change jobs. Employment stability is important when you’re borrowing money, as it is a good indicator that you’ll be able to pay that money back and have a resource (i.e., a job) to make that happen. While this action may not be an option, recommend that they don’t proactively enter the job market until after they depart the closing table.
- DON’T increase their debt. Just like savings and assets, the same is true for the other side of the coin. Strongly advise against opening any new loans or credit cards and discourage the purchase of large or excessive number of items, such as furniture and appliances for their new home.
All these actions and inactions can be summarized as “maintaining the status quo.” Your member’s qualification and ultimate approval depend on doing so, as all your credit union’s decisions thus far have been based on their current debt and income. This is a solid case where maintaining the status quo is the best option.
As your members’ trusted home loan advisor, it’s very important for you to provide the education behind the entire mortgage process and why the status quo is the way to go. After all, you don’t want any furanocoumarins to inhibit your member’s CYP3A4 enzyme (thank goodness for Google, right?). Advise them to forgo that delicious and enticing grapefruit so that they can enjoy and relish the trade-off: a new home!