Do you enjoy game shows? I know I certainly do—back on my home planet of Amicitia, similar competitions are held in front of what your television announcers refer to as a “live studio audience.” We have one competition that is very similar to a very popular game show here on Earth. It’s where my fellow Amicitians match wits on topics like “Carbon Fusion,” “Parts of the Tentacle” and my personal favorite, “Potent Potables.”
As I wrap up my series on the member benefits of mortgage pre-approvals, I thought I’d launch some game show flavor into this week’s post. Are you ready to get your game on? Let’s go!
“I’ll take ‘Credit Union Mortgages’ for $400.”
The Answer: “Buy a new car.”
The Question: “What is one of the things a member shouldn’t do after they receive a home loan pre-approval?”
The reality is, there are many things a member can do that would JEOPARDIZE their home loan pre-approval. To be a great credit union mortgage lender, one of the key things you can do is to communicate with your members on what NOT to do once they are pre-approved for a mortgage loan.
In my previous two posts, I’ve outlined the importance of getting pre-approved as well as the steps that follow the pre-approval. As you’ll recall, one important piece of information used to determine your member’s eligibility and pre-approved loan amount is their credit score. What your member may not know is that before the credit union can completely approve the mortgage, their credit score (and other financial factors) will be checked again.
[Gasp from the studio audience]
This is precisely why you need to tell your members that between the moment they’re pre-approved and the closing date, it’s best to maintain the status quo. As they continue to move forward in securing a home loan, they need to keep in mind that nothing is guaranteed until they sign the closing paperwork. You need to make absolutely certain that they know this.
In addition to their credit score, you can outline some of the other key factors that enable them to get pre-approved. These include their income, debts and other assets. If any of these criteria change from when the pre-approval was received to when the home loan closes, the loan could be in jeopardy.
For example, let them know that if something negative hits their credit report, it could lower their score below loan guidelines. Or, if they go on a shopping spree and debt levels significantly rise, it could push their debt ratio outside of the minimum requirements. Fortunately, there’s a simple way to avoid these financial mishaps: MAINTAIN THE STATUS QUO.
Simply put it this way to your member: Don’t play games and make any changes that could negatively affect your income, assets, debt level or other financial factors until you close your home loan. To help ensure this, recommend that they:
- Don’t tap into their savings account or reduce current assets.
- Don’t switch jobs.
- Don’t run up credit cards.
- Don’t increase debt—that includes opening any new loans or credit cards.
- Continue to put as much money aside as possible in case closing costs are higher than estimated. Now is not the time to risk it all!
Now it’s time for the final round…
The Answer: “Maintain the status quo.”
The Question: “How can credit union members get to the closing table faster?”
Keep your member’s pre-approval out of jeopardy by being a GREAT mortgage lender! It’s the credit union way of doing business—save the game show nail-biting and high stakes for TV!