I Didn’t Think

I Didn’t Think

It’s a tough thing to understand when you’re not working in the mortgage world. Most home buyers only experience a purchase or refinance every 4 to 7 years. Every year the rules change a little along the way but in reality, the basics remain the same.

The basics are the simple stuff which include your  income, assets, credit liabilities, credit score, and the price of the home you are purchasing. You would think that if you only have $2000 saved for a down payment and closing cost maybe you should not be looking at $400,000 homes.

One of the bigger problems we face during the processing of a loan is not getting everything we asked for. The basics can break down in to great detail. These details can be overwhelming to some, while others have no problem getting or understanding what we need.

Take income for an example; income is more than just a pay-stub. It’s the break down between hourly wages, overtime, salary, commissions, full-time versus part-time and being self-employed. To count commission and over-time we need a two-year history in order to count that type of income.

Breaking down income includes tax returns, tax transcripts, all sources of income researched, verification of employment over the past two years, expectations and probability of the income continuing over the next three years.

As for assets, it’s more than just your checking and savings accounts. It also includes any stocks, mutual funds – whether in a qualified retirement plan or not. Assets include all real estate owned. Yes, even that small piece of vacant land in Hoboken Georgia. We will have to count the property taxes toward your debt to income ratio.

This is where the frustration part starts. Most people tend to think we will never find out about this piece of land or the little timeshare in Cancun or whatever those other little properties you own are. Most people don’t think it matters or some don’t think we will find out about them.

The toughest part is that we may not find out about these properties until a week before your scheduled closing. These out of the way or out of sight properties tend to cause our biggest delays. Not only do we have to get a copy of the tax bill but if the property is in any type of homeowner’s association we need documents about that and then if you have a mortgage on the property whether a standard loan of private mortgage we that information as well. If you don’t have a mortgage this could even be a bigger pain as we have to prove you do not have one. This may include doing a title search on the property. Sometimes taking up to two weeks to complete.

Another big one is not telling us about another account and then just before closing the person moves money from that unknow or undisclosed account over into their checking and savings. This will now require us the get two months or sixty-day history of that account and have to verify all deposits in that time period.

I think you all get the point I am trying to make, getting us what we need at the beginning of the process is very important to ensure you close on time. If you have something we did not ask for, tell us about it and ask if we need it in the beginning. This will help all of us to stay on schedule.

Ask questions get your fact and we will see you at a happy closing table.

Every now and then I start to think that I have heard or seen it all and every time I do, I have someone do something new.