Subprime Loans- Still in Business?
Subprime Loans
A lot of our buyers think the bad loans went away with the current mortgage crises.
Be careful.
Right now, there are some good mortgage products available,
especially for the first time home buyer,
but you may never know about it.
(flashing red light)
Here's the setup.
A first time home buyer tends to be very unsure about the home buying process, and usually they are not confident at all in their financial ability to purchase a home.
Here is where the subprimers come in. Now, especially with African-Americans and Hispanics, the subprimers will operate in the churches. They gain trust by getting to know families. They might even help the buyer with credit isues a little bit, in order to build loyality.
When the buyer is ready, the loan officer will sell a loan product that makes the most possible money for the broker, rather than what is best for the buyer. If someone challenges the loan terms, the mortgage broker tells the buyer, "Trust me, not them. I go to church with you."
What's wrong with making a big profit? That's not my point.
I just think a home buyer should know their options.
Tip: Remember the relationships.
A Realtor is bound by a client relationship with the buyer, meaning the Realtor represents the best interests of the buyer. (provided you have a signed relationship agreement with the Realtor)
A loan officer has a customer relationship with the buyer, meaning the loan officer has loyality to the mortgage broker, not the buyer.
Does this mean the Realtor will find the best mortgage loan for the buyer? No, but it does mean a Realtor can help you explore some options. Of course, the final choice is up to the buyer. I just want you to know you have options.