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The Importance of Being a Great Loan Officer
As a loan officer, it’s crucial to stay up-to-date with the latest programs and products in the market. Did you know that you can do 100% financing on an FHA home loan with a credit score as low as 600? While FHA loans are available for scores down to 580, finding a lender for those loans can be challenging. However, we can fund a 600 FHA loan with 100% financing.
There’s also a down payment assistance program that gives your borrower $8,000 to use however they choose, including for reserves or paying off debt. If you can get a car or installment payment down to 10 months, you don’t have to count it in your ratios. And the best part? There are no income limits, and Fannie Mae, Freddie Mac, and Ginnie Mae have all given their blessings.
Programs and products are coming online fast, and they could be the solution to the difficulties in qualifying borrowers for loans. In the past, loan officers were judged by the programs and products they could offer. Bond loans, for example, may not be the most desirable, but they provide an opportunity to showcase your suite of services to agents, leading to easier and better loans to close.
If you have a client whose ratios are too high to qualify or a self-employed person with a “feast or famine” income cycle, a 600 score FHA loan might be the answer. Alternatively, Oaktree’s bank statement loan could help if the person has an additional source of income that cannot be used for qualifying purposes with the big three (Fannie, Freddie, and Ginnie).
For self-employed individuals who write everything off, there’s a loan product that treats a 1099 exactly like a W-2. You might be turning down perfectly good clients without realizing it.
It’s essential to remember the quote from Herbert Spencer: “There is a principle which is a bar against all information, which is proof against all arguments, and which cannot fail to keep a man in everlasting ignorance—that principle is contempt prior to investigation.” Don’t rest on your laurels; this market demands product knowledge more than anything. Be the loan officer with the answers, and you’ll find the loans.
Shifting gears, let’s discuss the potential consequences of Freddie Mac’s move to make second mortgages easier, faster, and cheaper to obtain. While this may lead to a spending extravaganza, it could also result in homeowners going deeper into debt. Once the equity is spent and the dust settles, what then?
As a lender, it’s important to write these loans, or your competition will best you. Remember, second mortgages are shortcuts to the first lien loans you really want to write. So let’s go out there and be the best loan officers we can be!
