Residential mortgages in America today are designed for families to fit a box. If your financial profile in anyway is outside of that box, you might experience what otherwise might be a very difficult and challenging process, so it’s important to know how the process works. Here’s what you ought to consider …
Here’s how most mortgage companies run their mortgage loan process. Step one. Do an application for credit and let the lender pre-qualify you for whatever your desired purchase price is supportive of the cash, credit and income. Then the file gets moved into underwriting and the loan will come out of underwriting approved with conditions. Provide these conditions and you’ll receive a commitment to lend. Lender requests conditions from you. The perfect scenario is conditions are reviewed signed off and you order docs, sign and fund and close. That’s not common. Here’s where things bottleneck…
This is when the documents you provide creates more conditions. If you have multiple rental properties for example or multiple streams of income or several different types of bank accounts where your down payment monies or multiple businesses, this is where things can become tricky. It’s more the most part not possible for lenders to have a zero conditions loans. Remember the job of the underwriter is to mitigate risk. They find, create and sign off conditions. They are the only one standing between you and keys to the house and they control whether you get your loan or not or after lots of hoop jumping.
•Keep your accounts separate
•Keep your business separate
•Keep all schedule of real estate separate and detail
•Be prepared to at times send in the same docs more than once
A way around the inevitable hoop jumping you might otherwise experience is getting your lender to pre-underwrite your loan especially if it’s complex, heavy, ultra-detail or technical. A good lender at the beginning should be able to articulate the level of difficulty your financial scenario may represent to an underwriter. Note a lender who has working good relationship with underwriting is a solid bet. Avoid the lender that has no direct contact with underwriting.
Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at www.sonomacountymortgages.com.