Advice In Choosing A Lender

Choosing A Lender Who Is Right For You

Once you have decided to become a homeowner and start the home buying process , one of the most decisions you will need to make is choosing a lender who can not only just help you secured a mortgage home loan, but choosing a lender that you will feel comfortable working with throughout the mortgage process . The mortgage process will be stressful for many, especially when a mortgage underwriter will knit pick on a mortgage file and ask condition after condition or when the borrower provides all the list of conditions on the conditional loan approval and the mortgage underwriter will come back with another batch of conditions. Choosing a lender you feel comfortable to work with is no different than choosing a doctor, accountant, insurance agent, attorney, realtor, or other business professional.

Referrals By Realtors And Friends In Choosing A Lender

Most home buyers will ask family, friends, or real estate agents in their journey in choosing a lender. This is a great start. Some home buyers may have friends, family, or relatives who are loan officers. Some may choose their mortgage lender from ads on television, radio, fliers, or newspapers. Others who are very private want to do their own search in choosing a lender. Many may go to their local bank to see if they qualify for a home loan. However, a large percentage of home buyers will search the internet for mortgage brokers. Choosing A Lender who you can get along with is extremely important, however, choosing a lender who specializes with your income and credit profile is more important.

Not everyone has 800 FICO credit scores, perfect payment history, 20% down payment, and low debt to income ratios. If you have the highest credit scores and excellent income with substantial down payment, you can go anywhere for a mortgage loan and get the best terms and rates. Unfortunately, that is not how the real world works. Many hard working Americans have had patches in their lives where they had periods of bad credit, have outstanding unpaid collection accounts, had a bankruptcy, had a foreclosure or multiple foreclosures, had deed in lieu of foreclosure, had short sale, have charge off accounts, had late payment history, have little or no down payment and/closing costs, had gaps in employment, are self employed with little or no documented income, or had other credit and income issues where not all mortgage lenders can help them.

Not All Lenders Have Same Loan Requirements

One important thing home buyers need to realize is that not all mortgage lenders have the same mortgage lending requirements on the same loan programs. For example, not all FHA mortgage lenders will have the same FHA mortgage loan requirements. Most FHA mortgage lenders will have FHA Lender Overlays which are additional mortgage lending requirements on top of the minimum FHA Guidelines that is set by the Federal Housing Administration. For example, to qualify for a FHA Loan with a 3.5% down payment, FHA requires a minimum credit score of 580 FICO. However, if you walk in to any bank, they will tell you that you cannot qualify for a FHA Loan without a 640 FICO Credit Score. This is called a FHA Overlay On Credit Scores where the mortgage lender requires a higher credit score than the minimum credit score requirements by FHA. Same with debt to income ratios. FHA allows up to 56.9% DTI for borrowers with at least 620 FICO Credit Scores. However, many banks and mortgage companies have DTI Overlays where debt to income ratios are capped at 45% DTI even though FHA minimum debt to income ratio caps is at 56.9% DTI.

Home Buyers who have credit or income issues should do their own evaluation and seek out mortgage lenders who specialize with borrowers that have your type of problems. For example, if you have high debt to income ratios and the mortgage lenders you consulted with have overlays on debt to income ratios, you can Google ” Mortgage Lenders With No Overlays On Debt To Income Ratios” and a list of mortgage lenders with no DTI Overlays will show up in the first few pages on the search engines. Same with low credit scores. If you have credit scores under 600 FICO and most mortgage lenders you consulted with have lender overlays on credit scores, try to Google ” Mortgage Lenders With Under 600 Credit Scores” and a list of mortgage loan officers and mortgage companies that specialize with no lender overlays on credit scores will show up. You can then start interviewing the mortgage lenders that can assist you with your credit and financial profile and choose a lender that you feel most comfortable with.

What If You Are Told You Do Not Qualify From Multiple Lenders

Over half of my mortgage loan borrowers come to me because they were told they do not qualify by multiple mortgage lenders or had multiple mortgage lender denials . Most mortgage lenders do have lender overlays so even if you meet the minimum mortgage lending guidelines, the lender you consult with may have higher lending standards than the minimum mortgage guidelines set by FHA, VA, USDA, Fannie Mae, or Freddie Mac. Borrowers can consult with 5 or more lenders and be told they do not qualify for a home loan. Many of these borrowers are smart and savvy so they will not take no for an answer, they will research whether or not they meet the minimum lending guidelines, and if they do will search on Google for Mortgage Lender With No Overlays and will find a list of mortgage lenders who have no mortgage lender overlays. If you were denied by multiple lenders due to their overlays, look no further. Contact me at 262-716-8151 or email us at

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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