It's definitely true. Much has changed in the Mortgage Industry and the financing of homes in a very short time.
But one thing has not changed. That is the importance placed by Mortgage Lenders and their Underwriters on the most recent 2 years of a Mortgage Applicant's life.
Why is this 2-year period so important?
There are several factors that are considered and weighed by Underwriters when they're reviewing a Mortgage Application for Approval. Many of those decision-making factors take place during "the most recent 2 years" of a potential Borrower's History.
And sometimes there are also "waiting periods" tied to the "passing of time" during this 2-year period. Examples of lending tied to this "passing of time" period are:
- FHA's timeline for acceptance of a Borrower's filing and subsequent discharging from a Chapter 7 or Chapter 11 Bankruptcy
- VA's guideline requirement concerning a 2-year waiting period after a Short Sale or Foreclosure
But EVERY Mortgage Applicant, whether they are a First-Time Homebuyer, someone returning to home ownership, or Refinancing, must disclose the following at the time of their application:
- Employment History
- Residence History
- Payment History
- Information regarding the amount and type of debt they have incurred
So what gives with the Mortgage Industry's obsession with the last 2 years of your life? What answers are Underwriters seeking ... or what clues or insights regarding your behavior are they examining throughout that time period?
Simply, they're watching for an established 2-year pattern of financial and employment:
- Stability
- Reliability
- Consistency
- Accountability
- Responsibility
So, if you're someone hoping to buy a home or refinance, know that the most recent 2 years of your life will be examined closely during your Mortgage Process. A 2-year residence history, income (all types), current savings/savings history, and current credit/credit history will have to be documented and provided to your Lender.
But also consider this good news: If you have suffered financial problems in the past, you are NOT condemned to rent forever.
The Mortgage Industry provides pathways to help you successfully become a homeowner either for the first time or once again. And in most cases, you can get on solid financial footing within ... yep, you guessed it! A TWO Year Period of time.
Kinda ironic, right?
But true. Often, in a 2-year period you can build from scratch ... or re-build credit. A stable employment history can be established. Money can be saved for a down payment.
It's also true that help and guidance is readily available. With the help and guidance of a Mortgage Lender throughout that 2-year period, you can typically gain the credit/credit history and ability to borrow money to become a homeowner, if you follow the advice and directions they provide.
Bonus Alert: That help and guidance is often provided to you at NO Cost.
Whether you're just beginning your journey to home ownership ... or hoping to return to it once again, in the Chicagoland-area reach out to me today. The sooner we get started, the sooner you reach your goal ...
* Hoping to Buy, Build, or Refinance a home in the greater Chicagoland area? Contact Me today! I'll put my 37 years of Mortgage experience and expertise hard to work on your behalf.
I can be easily found at:
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