First Time Home Buyers in Orange County Calif are finding that the number of available homes for sale has shrunk to the point where making an offer and getting it accepted is a competition. As in any competition, the strongest competitor will almost always win. In the case of purchasing a home,you become a strong contender by making sure that your financing is in place before you make that offer.
The process of securing financing is not as simple as filling out an application and 5 minutes later receiving an answer. There are significant steps involved in becoming mortgage ready and this is part five:
Choose Your Lender...Carefully!
The lender you choose can help make your purchase a smooth one if you know what to look for. Here are some tips on how to choose a loan officer:
Regardless of which type of lender you choose (Big Bank, Internet, Mortgage Lender or Mortgage Broker), your loan officer will make the difference between a smooth transaction and one that is filled with anxiety. Here are some things to look for when choosing a loan officer to help you with your home loan:
1. Your loan officer should take a full and complete credit application from you. It is okay if they
don't ask about any debts - these will be integrated into your loan application when your credit report is requested.
- 2 months bank statements
- Copies of the details of any deposit that comes from unsourced funds (read my article on sourced vs unsourced funds)
- 30 days pay stubs
- 2 years of W2’s and possibly 2 years of tax returns
- Copy of your driver license
- Copy of your social security card
- Signed Borrower Certification and Authorization Form
- Signed 4506-T form authorizing us to request copies of your income tax transcripts
- Signed SSA Form authorizing us to verify your social security number
If your loan officer does not do a thorough job of evaluating your credit, income and assets before issuing you a loan approval letter, then you do not have an approved loan.
4. Once your loan officer has completed their review and documented the file appropriately, he or she will run your loan data through an automated underwriting system – typically desktop underwriter. They will be looking for the “DU Approval” which gets you most of the way there.
It is important to understand that:
1. An underwriter, a live human being, has the final say on whether or not your loan is approved.
2. The collateral for the loan (your dream home), must fit the loan guidelines as well so even if your financial profile is approved, if the property does not appraise for the offer price, or some other condition of the property is discovered that falls outside of the loan program guidelines, the loan approval may not be valid.
The criteria for qualifying for a mortgage is complex, so it is important that you contact a loan professional to obtain a pre-approval before you make that all-important offer on your dream home. I spend lots of time making sure my clients understand how to obtain a home loan - we always start with a conversation about what your goals are and I spend as much time as needed answering questions and educating you about the commitment you are getting ready to make. A mortgage is the biggest financial decision you might ever make and I want to be sure there are no surprises...ever!
For more information and a no-pressure conversation about your ability to qualify for a home loan, give me a call at (714) 403-2603 or send an email message to Linda@LindaOnLending.com.
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