Do you know if your clients' credit will be the same right before the closing day?

By Bill Arce

As a former real estate agent, I always advised my clients (once they were pre-approved) that for the time they were applying for a mortgage it was not a good idea to be messing with their credit. Why? Because usually the underwriter will check their credit report one more time prior to closing their mortgage application and if it is not up to the standers or the ratios have changed the application may be denied.

So, for the next 45-60 days, I would say to them repeatedly, to do not open a new credit card, buy a car or a boat, and more importantly to pay their bills on time. This may seems simple, right? Well, we know that our clients sometimes do not follow our advice and the deal could fails to close because our clients forgot to mail in the $20 credit card payment.

What can you do as their advisor to help them avoid killing the deal? The following tips are those that I learned the hard way when I was active selling houses and also implemented as a loan consultant, I hope they will assist you as well.

• Set the table: If your niche is Latino homebuyers, especially those who are first time buyers with little or no credit, you as professional should be educating them about the repercussion on their buying process if they fail to maintain a good credit history while purchasing their home. Be clear with your clients; let them know they may lose their dream home if their credit is not the same as the time they first applied for the mortgage.
• Expect the unexpected: Ok, you know that you were as informative as one professional can be, and in many times you continued addressing the credit issue and how important is for their sake to be careful, but don't be surprised if they buy a new car prior to closing. Be ready to overcome a situation like this one if you would like to save the deal.
• Help them avoid overspending: First time homebuyers would normally need to purchase new house items like a lawnmower, furniture, or just needs new materials to do some cosmetics repairs to the new home. Well, all these cost money and if you help your clients save money during the real estate transition, chances are they won't need to use their credit cards to purchasing things they may need after the closing.

Just remember as professionals we are responsible for the success of others as our own, if your client don't close their transaction we might lose more that just the commission.

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