So one of my 2017 Resolutions (more blog writing) I haven’t been too up on.
Well, let’s change that….
I want to clear up some misconceptions about Mortgage Prequalifications today. Some people think that you can get them in 10 minutes after talking with a mortgage person.
That’s actually true……But you shouldn’t trust it.
What’s that mean? Simple. If a mortgage person is giving you a prequalification certificate that states your qualified based on information they took over the phone, that certificate isn’t worth the paper it’s written on (In my opinion).
The truth is if a mortgage professional isn’t checking your paystubs, tax returns, bank statements to verify the data you’ve provided them, you have the potential for problems. If the data you give them doesn’t match up (and it might not seem like much), it could have a major effect on whether or not you obtain a loan.
I’ve seen many a paper come across my desk that wasn’t worth the paper it’s written on. Some agents don’t understand the reason why either.
Here’s the reason: Banks verify information.
It’s the way the evaluate the risk of the money they are lending out and the ability to repay the loan.
So when a ‘mortgage professional’ asks you, “How much do you make? Do you have a job? How much money are you putting down? How’s your credit?” and issues you a ‘pre-qualification’ based on verbal responses…..they aren’t doing you any favors.
Well…..first off, you might make $100,000 per year, but $25,000 isn’t recorded because you get paid in cash. That’s a problem.
2nd – Your putting 20% down (downpayment), but it’s ‘in the mattress’ (Translation: not in a bank) or are getting a gift from someone. That’s a problem.
3rd – You think your credit is good, but haven’t had it checked in awhile and there is someone that has the same name as you and it has adversely effected your credit. That’s a problem.
This is the main reason why it’s always important to make sure you discuss this with your agent and mortgage professional and be wary of those that don’t require information.
Many of these issues that I’ve talked about are NOT possible deal breakers. Many of them can still get Mortgages.
The issue is always one thing: TIME.
If you have already found something, Time isn’t your friend. It’s your enemy.
If you haven’t already sat down with a mortgage professional, the chances that they can fix something is a long shot. This is the reason that EVERY BUYER I work with, I have a mortgage consultation with. Sometimes I can see a problem before it hits and can direct a buyer to the right spot in order to help fix it. As a buyer, you should be educated on what banks need for you to get approved because there is ALOT of misinformation out there floating around the Internet.
It’s also important to make sure your dealing with someone that has been licensed by the NMLS (Nationwide Mortgage Licensing System). In order to be licensed, mortgage professionals need to complete a specific set of course work and education and take a state mandated test, as well as a national test. Professionals in the NMLS also need to do a specific amount of Continuing Education every number of years as well.
It could be the difference between you getting the loan and house you want…