Back to Basics - Mortgage 101

In case you’ve been hiding under a rock for the last 18 months, this is my opportunity to share with you what to expect when getting a new mortgage loan. Each loan file is scrutinized by about 10 different people. Don’t let that scare you, just be prepared for it. Make sure you disclose everything to your loan officer. Technology has enabled us to pull complete background checks if necessary. If you don’t disclose upfront, chances are when the “peeling of the onion” progresses, undisclosed issues may arise.

Let me give real life examples:

• A client comes to me, I qualify and pull credit report. There are “inquiries” on the credit report. If an inquiry results in new debt, you need to disclose the terms of the new debt along with supporting documentation. It’s important not to engage in any large purchases prior to purchasing or refinancing a home. So, don’t go buy a new car prior to applying for a new loan.

 • Earnest money and cash required for closing: Any funds required for purchasing or refinancing a home must be documented. Cash is typically not considered an acceptable source of funds. A paper trail will be needed to show any transfer of funds.

 • Did you just get a new job? If so, no worries as long as you aren’t commissioned or can’t guarantee how many hours you will work. If you’re newly commissioned or self-employed, I’ll need to see a 2 year history.

 • Did you co-sign with somebody on a debt? If so, no worries – I’ll typically have to include that debt in your qualifications regardless of who is paying the debt. (of course each case is different – just be aware co-signing may affect your situation)

These are just a few instances of things to look out for. Your best bet is to council with a trusted professional before entering in to a purchase agreement to make sure it goes as smoothly as possible! I look forward to your comments and questions.

To your success!

aMY L cavENDER

Simplified Mortgage Solutions

Twitter: @mylender