|Buying a house with peace of mind
The majority of mortgage loans go wrong because the mortgage lender was unaware of a financial component of the borrower’s loan package. The solution? Hold nothing back from your mortgage lender. Remember, this person putting your mortgage loan together has an enormously large responsibility in making sure your loan actually closes. Don’t you think it might make the best sense (even if the information is negative) to share everything with your lender so they can help you buy a house stress free? Of course it does. Your lender needs to know about the following 20 items:
• Leaving town during the loan process
• Changing hours at the office
• Taking vacation time
• Taking maternity leave
• Taking 2106 business expenses on your federal income tax returns
• Income changing
• Purchases using your credit card ( a big no-no especially during the escrow process)
• Cyclical unemployment with your job even if it’s customary
• Being married (on government loans such as an FHA loan or a USDA loan credit a credit report from the spouse is required)
• Be able to explain and provide a “paper trail” of any large deposits into your bank account (or anything that will show up in your bank account outside of your regular paycheck)
• Filing tax return extension
• Landlord’s contact information as well as previous ones
• Switching from being self-employed to W-2 (or vice versa)
• If self-employed sole proprietor, remember the mortgage lender will be looking at your schedule C your net profit or loss.
• Marital status switching during the loan process
• Undisclosed debts (that might not show up on a credit report)
• Alimony or child support payments
• Salary and/or income dropping in the near future
• Job gaps in the last two years will also need an explanation (hopefully jobs are within the same field)
• Explanations will be required on any money transfers between accounts
Buying a house as your primary residence, second home or investment property in any case, the mortgage lender will need to thoroughly examine your financial package. Mortgage lenders require very tight scrutiny in underwriting these days because of all of the abuses and lending over the last several years.
Fannie Mae and Freddie Mac are more concerned with risk than anything and that risk can be mitigated by working with a local mortgage expert who understands underwriting and your process of buying a house will be made that much easier.
Every mortgage company today has underwriting requirements. It’s no different from a mortgage broker, a mortgage bank or a direct lender. All lenders today operate under the hub of Fannie Mae and Freddie Mac. No lender has a monopoly on the market today and as a result, it’s a level and fair playing field to qualify for a mortgage loan today.
Thinking about buying a house? Get a conventional or government mortgage rate quote to buy a house today and see where mortgage rates are for your loan scenario. There is no cost and zero obligation.
Scott Sheldon is a local mortgage lender, with over six years of experience. Visit him at www.sonomacountymortgages.com.