Lamenting Loans

Real Estate Agent with Century21 Drue Self Real Estate

Recently I had a couple call in wanting to buy a house. I asked if they had been pre-qualified and they said yes, the VA in D.C. had told them they could afford a house. I showed them houses within the price range the VA had given them, and when we found one they liked I had them go to the sellers preferred lender because it was new construction. The sellers lender told them after a first interview that they could afford about $30,000 less than what the VA had initially told them. This set us back, but we were still able to find a house that suited their needs (there were some medical issues that the house needed to be able to accommodate). This house was a listing from my office and I had been marketing it, so I was very excited to write an offer on it. We wrote an offer up on Friday, and I had them set an appointment with the lender for Monday morning. The sellers ended up being gone for the weekend, so they could not come in to view the offer until Monday at noon. Before they showed up, my broker and I received a call from the lender, who is a friend of everyone in my office, and told us that my buyers had not been completely honest with us.

Now this was huge setback. They couldn't qualify for any loan amount. I learned a huge lesson, and that is to make sure that all buyers are qualified, no exceptions. It doesn't take much time to call your bank or a mortgage lender to find out what amount you can borrow. It takes much more time to look at houses you think you can afford, only to find out that you can't.

For the benefit of all buyers, here are some things that you should be ready to give your lender in order to be qualified for a loan:

10 Things a Lender Needs From You
W-2 forms or business tax return forms if you're self-employed for the last two or three years for every person signing the loan.
Copies of one or more months of pay stubs from every person signing the loan.
Copies of two to four months of bank or credit union statements for both checking and savings accounts.
Copies of personal tax forms for the last two to three years.
Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, e.g., a boat, RV, or stocks or bonds not held in a brokerage account.
Copies of your most recent 401(k) or other retirement account statement.
Documentation to verify additional income, such as child support, pension, etc.
Account numbers of all your credit cards and the amounts of any outstanding balances.
Lender, loan number, and amount owed on other installment loans-student loans, car loans, etc.
Addresses where you lived for the last five to seven years, with names of landlords, if appropriate.

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2005. All rights reserved.

Comments (1)

Walter Tang
Guaranteed Rate, NMLS #2611 - Los Altos, CA
VP of Mortgage Lending
I'm sorry you had to go through that whole process. I'm always telling my 1st time homebuyers..."Get Pre-approved" before starting your home search. Consumers tend to overlook the financing portion of the deal, which can be a hard lesson. People love looking for the end product --the dream home, only to find out they can't get approved when they're ready to make an offer. In some cases, people are already in contract!
Mar 13, 2007 05:26 PM