This Is You. This Is You On Paper (And You Just Got Shredded)

Remember the old TV commercial that went like this:

This is your brain. This is your brain on drugs.

For those of you too young to remember this anti-drug TV spot, your brain on drugs is supposed to look like a fried egg on the sidewalk (not so subtle message of "you can fry your brains out if you take drugs").

But here's a newer version for you:

This is YOU: Good person. Good credit. Hard worker. Pays the bills. Pays taxes. Contributing member of society. Needs a mortgage.

This is YOU ON PAPER:  Loser. Application declined. Next stop? Paper shredder.

How can you NOT take this personally?

Sometimes we forget this important fact: When the lender looks at your credit application, he only sees the PAPER YOU.

Not the REAL YOU.

It is distressing to me, that increasingly, the 2 "YOU's" are miles apart. Once stated income went away, all those holes in the lending world that stated income supposedly plugged, are gaping open again.

YOU: Are a respected,  self employed business owner for 20 years. You make plenty of money to pay your bills and pay your mortgage. Your credit has been perfect your entire adult life. You are able to write off business expenses and losses against your business.

YOU ON PAPER:  Don't show enough income to qualify.

 

 

 

 

 

 

 

 

 

YOU: Always have plenty of cash on hand to buy your friends a round of drinks. That's because you get much of your income from TIPS, and very little from your wages.  

YOU ON PAPER: Have an income way too low to qualify.

YOU: Are the savior of your family.  You take care of grandpa and in exchange, he makes your house payment and writes you a check for a small salary. You don't work because you take care of Grandpa.

YOU ON PAPER: Are unemployed.

YOU: Are a caring parent who lovingly co-signed to get your kid a car.   Johnny was too embarrassed to tell you he was late on his payments 6 out of 12 months last year.

YOU ON PAPER: Have bad credit.

 

There is zero tolerance for lack of income and poor credit when making an application for a mortgage. As you do your taxes, and make financial decisions, remember this:

This is YOU. But the bank only cares about the YOU ON PAPER.

You don't want to fry your brains out just trying to get a mortgage.

Or in the shredder because you can't.

 

 

Written by Janet Guilbault, Mortgage Lending Specialist Based Out of the San Francisco Bay Area