Q A Z Z O O . C O M


Real estate Leads - selecting the right onesIs it a good time to buy a home now?

The Real Estate market is excellent in many areas of the country. Real Estate Leads can be found everywhere. Home prices are either holding steady or have increased slightly. Best of all, mortgage interest rates are still extremely low.

Here is my dilemma –

Have you been reading many articles that tell us that it’s a great time to buy now?

Reasons cited are:

  • low interest rates
  • low home values
  • because there will be mortgage changes coming soon
  • and so much more?

Some existing problems that still occur in today’s market. Lenders, banks, loan officers, etc are still marketing or promising that you can get a mortgage with less than a 620 credit score. Realtors® then begin prospecting for real estate leads that fit this low credit score criteria. Sure, it’s possible, but you would have a better time at pulling your good teeth, because it might hurt more than that, once into the home buying process.

Do you want an opinion from a mortgage loan officer with 19+ years of experience that thinks with common sense, and not from the sales side of things? Don’t get me wrong, we all love to make money, but I also like to be practical and to educate.

Do you know why these lenders are jumping out of the window by lowering their credit score requirements? Mainly because HUD is forcing the hands of the larger banks to comply. By doing this, what do you think it does to the quality of real estate leads for prospective homebuyers?

But I don’t wan to get into the politics of things. Besides, there have been other smaller lenders that could go down to 580 in the last 2 years, but with little success. Let’s evaluate these new changes regarding lower credit scores.

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  • Requirements for credit scores under 620 and especially for under 600
  • You must have 5 percent down and the first 5 percent has to be your own money, meaning no gift funds from family members, no funds from non-profits, etc.. until after the initial 5 percent.
  • Qualifying ratios will be strict, trying to keep them around 31%/43%, which are normal FHA debt- to-income ratio guidelines.
  • Seller contribution will be limited to 3 percent.
  • Last but not least, the rates or pricing for these types of loans will be more expensive.


What I just mentioned above are the basic changes for someone to have a shot at getting a mortgage. But wait, hasn’t it been difficult lately to get a mortgage, even with the guidelines that we have now? And what does that say about the quality of Real Estate Leads?

I totally understand that there are some good buyers with low credit scores for various reasons, but I would have to say that this doesn’t fit the majority. Besides, I would rather educate the borrower on what needs to be done now so they can buy in two to six months. A true professional will either know how to fix their credit or refer them to a credit specialist.

Is it our natural instincts to want to help, but we cannot overlook the basics thinking that this would be good for the buyer now. Hence why real estate leads are important to both lenders and real estate agencies. But it comes down to the message being delivered, which can be misleading at times.

What about that person that only has 5 percent of their own funds, yet now they have used up their reserves, having nothing to fall back on in case of emergencies?

My concern is because we slammed down their throats that “it’s a great time to buy now.” In my opinion, it’s always been a great time to buy, when the time is right for that buyer. The right time is when they have been properly educated on the home buying process and when they have more than enough cash reserves for emergencies, etc.

Let me ask you a simple question –

How do you think we got into this mess starting back in 2005 and in which become evident in 2007 and 2008 with the foreclosure mess?

So my last question – As a realtor, how does your fiduciary responsibility sit with what I just mentioned?
Do you push that it’s a great time to buy for your commission check?

To obtain real estate leads – will you push the lower credit scores? Just food for thought…

As a buyer, be educated and take your time. Don’t fret if your interest rate goes from 3.5% to 4.5%. It could very well happen. Think about the reason why you are buying, and have a comfortable payment in mind. Don’t think rate.


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