Getting a mortgage and buying a home can be overwhelming and if you are not careful, some mortgage lenders will take advantage of this. It seems that the standard marketing playbook from most mortgage companies is designed to talk fast, scare and fool you into working with them before you cover all your bases. Don’t let this happen. There is a better way.
Basically, getting a mortgage approved, is like getting three legs of a stool in place. You need them all for it to stand. Those legs are your down payment, your debt to income ratio, and your credit history. I help you understand how all three of these impact your ability to secure a mortgage to buy a home.
Understand the difference between pre qualification and pre approval. Even with all the technology available today, lenders still cut corners and do a pre qualification instead of a full pre approval. This is bad, for both the borrower and the lender. A real pre approval is based on your actual, current documents and at a minimum has been approved by an automated underwriting engine. Neither the Mortgage Loan Originator nor the borrower can expect to skip this step and have things to go well!
The mortgage approval is like an iceberg. The easy to see part for you as a home buyer is “above the water”. What are my monthly payments going to be, based on my income and can I afford it? The second, and tricky part of our job, is the far bigger part of the iceberg that is under the surface. That part asks “does your loan conform to the Fannie Mae/Freddie Mac/FHA/VA guidelines? Can it be bought and sold in the aftermarket for loans? These guidelines are thousands of pages long and knowing how to apply them to your specific situation is the most important part of our job.
When considering which mortgage professional to work with, it’s critical to understand these three basic items. If you get fast talked into working with the wrong company, you don’t do a full pre approval or work with an inexperienced (think call center) mortgage broker, you won’t know you have made a bad decision until it’s too late to do anything about it! Maybe it only costs you money and your closing is delayed. Worst case, you lose the house you were wanting to buy and potentially end up without a roof over your head!
I make sure everyone we work with has all their bases covered. Once we issue a pre approval, the only things that should prevent you from closing are issues with either the appraisal or the title of the home you select!
