If you’re a First Time Buyer you MUST begin your search for a home with a Prequalification AND a Licensed Mortgage Loan Originator with at least 15 years experience.
Why 15 years? This is a person who worked in the mortgage business before the “Boom and Bust” years. During those toxic times all that was needed for a mortgage approval was a credit report and verification the Applicant had a heartbeat. Access to becoming a Loan Originator was ridiculously easy and it attracted all sorts of the wrong people. Those of us with real careers in mind often struggled to succeed competing against the amateurs.
In the “old days” of mortage lending we old-timers approved mortgage loans the same way we do now in 2013: with FULL DOCUMENTATION. That’s 2 years income tax returns and W2’s, 30 days recent paystubs and 3 months recent bank statements. It’s not enough, either, to have the documents. Those docs must be reviewed with a critical eye to anticipate obstacles to a loan approval.
For example: you took a loan against your pension two years ago. Your paystub indicates a repayment of that pension loan. If you’re qualifying for a Conventional, FannieMae type loan then the monthly payment of that loan is counted against your income much as a car payment, credit card payment or other monthly obligation. The pension loan payment is counted into the Debt-To-Income Ratio for qualifying purposes. And for some folks, they might not qualify with that payment.
The experienced Loan Originator knows about this guideline and
seeks out these stumbling blocks in the prequalification process.
What to do?
- Interview the Loan Originator: How long in the business? Do you focus primarily on Purchase loans or Refinance Loans? Do you review ALL required documents before you issue the Prequalification or do you simply run a credit report and ask me a few questions?
- Check NMLS: The National Mortgage Licensing System was created to provide professional standards for Loan Originators and to protect consumers. You can see the Licensing/Registration status of any Loan Originator on the NMLS Consumer Access website. Open up the “Self-reported Employment History” tab to verify that your Loan Originator wasn’t managing a fast food restaurant three years ago before getting into the mortgage business. http://www.nmlsconsumeraccess.org/
- Switch Loan Originators: when you called the Lender/Bank you weren’t “assigned” the Loan Originator. YES, you can switch to a different professional!
For the biggest financial decision of your life
work with an experienced professional.
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Hope that helps!