3 Key Topics for Managing Client Expectations in the Alternative Lending Space

Setting expectations in the alternative space is everything if you want a happy client that closes with you. Help your clients feel prepared by having a straightforward conversation about these three topics:

Rate expectations

Alternative clients often think they deserve bankable rates. It’s your job to help them understand why they don’t. We suggest positioning an alternative mortgage as a temporary measure that’s only needed 12-24 months until the client’s credit or income picture qualify for “A” rates.

If a client thinks they’re paying too much, they’ll keep shopping around. That means you, the broker, could possibly be spending your time on a client that will never close (with you).

Related: Why Mortgage Payments Matter More Than Mortgage Rates

Timeframe

You also want to explain the timeframe to your client. Alternative mortgage applications are more tedious than ever, thanks to tighter regulations.

Next-day approval and document reviews may not be realistic. Allow enough time to close (no, seven business days from application is not enough).

Documents

Lending requirements have changed enormously in the last 10 years. Lenders want more equity, lower debt ratios, higher credit scores, more proof of income, etc.

Prepare clients that they may be asked for upfront documents in addition to several more pieces of documentation after a commitment.

We hope these conversation starters put you and your client on the same page. Stay tuned to our articles for more broker tips!