Take the guesswork out of getting a loan to buy a home.

By
Mortgage and Lending NMLS#1089067

Take the guesswork out of getting a loan to buy a home.  Before shopping for a home, pick a loan representative to review your financial situation and complete a pre-qualification. Who you pick will determine the amount of worrying and guessing you'll have to do. Here are three basic questions to ask yourself during the pre-qualification process: 

 

1. Did your loan representative complete an entire application and ask all of the questions on the application?

If you were asked your name, social, and how much money you make, then receive a pre-qualification letter, don't expect a smooth process. The application has many components that help uncover any landmines in the loan process. The application form is the same one for all lenders. For example, in the application it has a place for base employment income, bonus, commission, etc. If you say you make $100,000, but your salary is only $65,000 and the rest is bonus, which you have only received for 8 months, that could be an explosion. In most cases an underwriter won't count commission income unless received for two years. Shame on your loan representative for not asking more income questions. Furthermore, garbage in equals garbage out. You want accurate application information submitted to the underwriting system for a quality pre-qualification.

 

2. Did your loan representative pull your credit and submit your application to an underwriting system?

An example of an underwriting system is Desktop Underwriter (DU), which is a system that Fannie Mae uses to automatically underwrite loans. As long as the information in the application can be documented, you will have a solid pre-qualification. Additionally, the DU will provide findings meaning loan conditions that will need to be satisfied before the loan can be closed, like paystubs, appraisal, W2s, bank statements, etc. You will feel less stressed if you know upfront what you need to get your loan.

 

3. Did your loan representative collect any documents upfront to support the information entered into the application?

By collecting income documents and asset information upfront, your loan representative can verify that the information entered is accurate.

 

In the past, I had a borrower tell me that they were not self employed and they were paid a salary as president. The findings stated that all that was needed for income was the last two years W2s and the last two paystubs. Once the loan file was underwritten, it was found that the individual owned 25% or more of the corporation that they were president of. The borrower became disgruntled and disillusioned about the loan process because of all of the additional documents requested. The lesson I learned was that I didn't ask enough questions.

 

Once again, take the guesswork out of getting a loan to buy a home. When shopping for a home loan, seek a licensed residential mortgage loan originator who you trust will review your complete financial situation. More questions equals a worry free no guessing loan process.

 

In Texas, contact Jimmy Smith for questions or a no obligation loan consultation.

 

 Jimmy Smith, NMLS#1089067

jsmith@alliancemtggroup.net, (214) 872-9091 Ofc 

 

Comments (1)

Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

I'm sure you see situation that someone tells you they are preapproved and when you start asking some questions, you find out, they weren't preapproved at all. Great job with your post.

Thank you for commenting on my post.

Jul 13, 2014 07:11 AM