In today's economy, lenders are just plain nervous. They are taking longer and longer to approve loans, running the buyer through every ringer they can find, sifting through their background like their all out do defraud the government, and making sure that they know absolutely everything they can about the borrower.
I've been working with a buyer who had some credit challenges. There was some old debt to pay off, debt-to-income ratios to lower, and scores to improve -- just a little bit. Then, a dark ghost came out of the closet. A tax return filed two years ago contained what the underwriter thought were irregularities so they called the IRS to verify what the borrower had put on their mortgage application. I think the most shocking thing is that they actually called the IRS.
Gone are the days of you just have to breathe to get a loan. Questionable loan officers were doctoring bank statements and pay stubs. Potential borrowers were lying about their income. Now they actually - VERIFY what you put in your application. Even if the loan officer doesn't verify it, if the underwriter has the slightest inkling that something isn't right, they're going to call whoever they have to in order to see if you're telling the truth.
So before you go choose just any loan officer to prequalify you, understand that your financial background is subject to a great deal of scrutiny. You'll need to be prepared to provide proof of where you get your money, explain why you may have extra cash in your account, and that everything on your tax returns is legitimate. If you're recently divorced, how your debt was split up can affect your ratios which may affect how much house you can buy.
Everyone wants you to succeed. The real estate agent wants to sell you a house. The loan officer wants to get you a loan, and the title company wants to close the file. But the underwriter, that person who evaluates your loan and decides if you're who you say you are and your financials are what you represent, that's the one who can make or break your deal. So make sure you've taken care of any ghosts in your closet before you go shopping for a house.
You'll be glad you did.
Heather Peck
Rosen & Company West
702-595-7380
