When it comes to financing a new home, not everyone is ready for the first conversation. That’s what Bill Katsoolias has learned after nearly 30 years in the lending business. As a senior mortgage planner with Wintrust Mortgage, Katsoolias takes extra care to educate homebuyers early on in their search — specifically first-time homebuyers.
“In this market, the first step is to have a plan. It’s vital for first-timers to know their numbers,” Katsoolias said. “Maybe they don’t qualify now … Plenty of clients I talk to aren’t ready to buy in this market and need to improve their credit or [organize] the down payment, but I can help them down the road if they follow the plan we prepared for them.”
And, as Katsoolias emphasizes, planning should occur before the house-hunting. “Sometimes I get a call, and the clients are looking at a specific home, but they don’t have a letter or anything … It causes stress,” he said, explaining that clients should seek help from a loan officer before they have fallen in love with a home and want to make an offer.
Once they do, and are pre-qualified, Katsoolias and his colleagues can determine the client’s budget. “This will help position them with their price point and their monthly payments,” he said. And this is where he works to relate with less experienced homebuyers. “Whatever mortgage payment we’re going to provide to them, they need to be comfortable with it — not me. And if they don’t know their budget, we provide them with things to think about that they might not expect while buying a home.”
Ideally that talk can take place in person, but what’s most important is establishing a genuine connection with the client. “A phone call can educate clients, but I don’t expect them to grasp everything,” Katsoolias said. His advice? “Arrange a time when they’re not distracted. Not when they’re at work. Work around their kids. If it’s a couple, both people should be in the meeting.” This may mean working outside the typical 9-to-5 hours. “In the translation of mortgages, it can be hard to understand some things,” he added. So, the goal is to lose as little in translation as possible.
Katsoolias tells first-time homebuyers, “Lean on the experts. Lean on your lender. Lean on your real estate agent. This is what we do for a living … There are no stupid questions.”
Once their budget is complete, the lending team can align clients with a real estate agent to begin their home search in earnest — a new type of challenge in this competitive market. With the lack of inventory, homebuyers have less leverage with their offers compared to five or 10 years ago. “These days, it’s a lot more difficult to get something under market. Unfortunately, we see people making offers and not getting the first few because they’re too low… We bring all that up in conversations of what to expect,” Katsoolias said.
Those conversations should also reach beyond just the client. “It’s always key for me to make sure I talk to not only them, but their agent. Then all three of us can strategize an offer,” Katsoolias said. There must be “constant communication” between the loan officer and the agent to ensure that homebuyers are not missing out on a home that they love, especially now.
“The inventory shortage is not going away anytime soon,” Katsoolias warned. And for those first-time buyers who may be struggling, he pointed out there are some alternative financing options. “Most people aren’t aware of down payment assistance options,” he said, noting there are conventional loans with a 3% down payment and Wintrust Mortgage’s own No Mortgage Insurance Program with as little as 3% down.
“With rates being so high, I also remind homebuyers that there are opportunities to refinance down the road,” he said. “We don’t know when that’ll be, but, rest assured, I’ll be calling them with those new opportunities as soon they’re available.”