The temporary nature of alternative mortgages
To continue on from last week’s article ‘Reducing client concerns about taking an alternative mortgage’, discussing the temporary nature of alternative mortgages with your concerned clients might be in your best interest.
An alternative mortgage is meant to be temporary; it gives your clients time to improve their situation and renew at a better rate in the future. Discussing your clients’ situation honestly and openly will help you discover how invested they are in improving their credit score. Calculate how long it will probably take them to improve their finances for a mortgage move, and then suggest the most realistic term that suits their situation. Most alternative mortgage terms are for one or two years. Then the mortgage can be renewed with one of the big banks at a lower rate if the clients’ circumstances have changed. Be sure to let them know that breaking a mortgage can cost thousands of dollars; take time to decide on the right term-length, so they can have the option to switch lenders and renew with no penalty when the time is right.
Help them improve their score
If you’re working with clients with a low credit score due to a significant life event, sit down with them and go through strategies to improve their credit. Sharing our credit videos with your credit strapped clients will offer them helpful ways get a handle on their finances.
Don’t forget about the self-employed
For your self-employed clients, finding ways in which they can prove their income to renew at a better rate will require a bit more creativity, but it’s doable. Read our gross ups & add-backs article and share it with your clients. Take advantage of write-offs and keep an eye on debt-to-income ratios. These can all be helpful in increasing your clients’ income to qualify/renew. And, of course, maintaining a good credit score is essential.
Walking your clients through the positive aspects of their alternative mortgage will calm anxiety and increase trust. Both are key ingredients in forming a successful and lasting relationship.