There are lots of ways to screw up getting a mortgage approved in 2014. Some should be obvious. Moving a bunch of money around, not paying your bills, changing jobs, putting things that the Realtors and/or Attorneys should know better about into the contract for sale are just a few. But some of the things are a bit of a surprise to you. They even can come dressed up as doing the right or common sense thing.
Take the idea of not working with the mortgage person you worked with last time. I covered what we do on my team for our clients on an ongoing basis in part one. I know we don’t win all return business. Sometimes I don’t get the right connection with someone we close a loan for, so they get the next loan with someone else. No worries, I win some loans that worked with someone else last time. That’s the business.
However, the big problem comes in when you don’t choose a professional mortgage person to get your financing. You hire someone in the call center, or from the internet, or the radio the ad, or worst of all because they are a big name bank and you have your checking and savings account there. That’s because, generalizing here based on plenty of experience, the “Loan Officers” that work there are a bunch of paper pushers. They don’t get paid much because they work “at the bank” and you get the short end of it.
When you hire a paper pusher, that is what you get. So you end up with your loan being “worked” on for a month or six weeks while you are planning your move to your new home. Inspections are done, attorneys are hired, an appraisal is completed and everyone is packing their boxes. The old home could be under contract as well. So everything is moving along and you get a week or ten days from closing and you don’t have a written commitment letter. It’s time to worry but you keep being told that all will be OK.
But it’s not OK at all. Because your mortgage doesn’t get analyzed at all for the first month or six weeks that those big box operations have it. The loan officers don’t get paid enough and the processors, underwriters and other operations people are horribly overstaffed. Your loan spends a month or so getting compiled and only then does someone look at it.
If the loan is not perfect at this point, your last week or ten days goint into closing are unpleasant to say the least. New/upadated paystubs are needed. Calls to accountants, HR departments etc. are common and now need URGENT responses in writing and in short order. That’s on the presumption that the loan is imperfect, but can be approved.
But what if after all the appraisals, attorneys etc. the underwriter found something like a 401K loan in your paystubs? Or they found a timeshare loan being made from your bank statements? You have a fatal flaw in the loan and now you can’t get approved, the day before you are supposed to close. Your big bank loan officer or call center processing staff never actually looked at the information you provided, they just stacked it thinking “It looks fine to me”. Add to this that your boxes are packed and you are selling your current home in the morning!
All of a sudden using the guys that do your checking and savings without hiring a pro because it’s easy does not seem like such a great idea.
You now better hope your mother in law has room on the couch for you & your kids.
The choice of who to hire to secure your home financing is always yours, but choose wisely, the risks are big, and real!
