Landing a New Mortgage in Today's Market

By
Mortgage and Lending with NFM Lending , Chad McShane, NMLS #342881 NMLS 342881

At the peak of the real-estate bubble, mortgage professionals joked that you needed only to be able to fog a mirror to get a loan. These days, even borrowers with good incomes and good credit scores can get turned down.  Much of the change is driven by the higher standards of the companies that buy mortgage loans, including Fannie Mae and Freddie Mac and various large banks.

Here's what you need to look out for if you're trying to land a mortgage, whether you're buying a home or refinancing:

1. You fail to stay on top of the paperwork.

By now, you should have a pretty good feel for how very much scrutiny your loan application is going to get. Lenders demand a ton of paperwork, and you should be prepared to prove anything and everything, especially your income and the source of your down payment.

Any missing document or oversight can delay or even torpedo your loan, which is why you need to respond instantly to your loan officer's requests.

Right before one loan was set to be approved, for example, Lepre got a notice that page 5 of the loan application hadn't been initialed. "Before, nobody would have called about something like that," Lepre said. "I try to prepare people that they are going to be asked for stupid things, right up to the end." 

Bottom line: Put your mortgage professional's number on speed dial and respond promptly to any document request, no matter how silly you think it is. Without every "i" dotted and "t" crossed, the loan might not get done.

2. House Needs Too much work

3. Appraisal Came in Short

4. You have too Much Debt

5. Self Employed and Your Income has Declined

6. Commissioned

7. Problem with your Tax Returns

8. Lender doesn't like you Condo

9. There is no mortgage insurance for your loan

10. You failed to pay your mortgage and creditors during the loan process. 

Comments (1)

Paul Warkow
Paul Warkow-D.G. Weber Law Associates - Hauppauge, NY

I agree with your list.  Let us add a few more:

1.  Need better comps on the appraisal.

2.  Cannot reach the employer to verbally verify employment

3.  Need to amend the 1003, disclosures, title and home owners to make sure the property address are exactly the same on everything.  For example if one document says So. 2nd Street and others say South 2nd Street, that is no good, they need to be all the same.

4.  Lender is convinced buyer and seller are related

5.  You decided to buy a new Lexus during the application process

6.  Lender needs updated pay stubs and bank statements for the 4th time

 

Oct 29, 2009 06:57 AM