How To Avoid Stress During Mortgage Process
This blog will discuss how to avoid stress during mortgage process. The mortgage process does not have to be stressful. The first and main reason to avoid stress during the mortgage process is to ensure that borrowers are properly qualified before being issued a pre-approval letter.
Over 75% of our borrowers at Gustan Cho Associates are folks who either got a last-minute mortgage denial or are stressed during their mortgage process.
How To Avoid Stress During Mortgage Process Before Issuing Pre-Approval
There is no reason for a mortgage denial if the borrower has been properly qualified. Those who think you have bad credit or low credit scores will bring stress during the mortgage process are wrong. Gustan Cho Associates is a mortgage company licensed in 48 states with no overlays on government and conventional loans.
There are ways how to avoid stress during the mortgage process. The team at Gustan Cho Associates will not issue a pre-approval if we doubt the borrower will not close their loan. We take a step further and ensure that our borrowers will close on their home loans on time.
Is The Mortgage Process Stressful?
Not all pre-approvals have the same weight. Loan officers often issue pre-approval letters in minutes without properly qualifying borrowers. The pre-approval stage is the most important step of the overall home loan process.
Homebuyers depend on their loan officers when they get pre-approved. Ensuring the borrower is fully qualified is how to avoid stress during the mortgage process. The mortgage process does not have to be stressful.
Steps To Follow How To Avoid Stress During Mortgage Process
There are certain steps how to avoid delays during the mortgage process. Borrowers stress during the mortgage process because of their loan officers. No reason anyone should stress during the home buyer and home loan process. Here are the steps loan officers need to take before issuing a pre-approval letter:
- Go over the 1003 mortgage loan application with the borrower line item per line item
- Many loan officers will assume whatever data and information the consumer listed in 1003 is correct
- There are instances where borrowers’ can transpose social security numbers, forget a digit, or enter the wrong information.
- After running the credit report, review each tradeline (including negative tradelines) line item per line item.
- If public records such as judgments and tax liens do not report on the record report, they will get discovered during the mortgage process.
All lenders do a third-party national party search, and all judgments, tax liens, and other public records will show up.
Credit Disputes Will Halt The Mortgage Process
Loan officers must ensure no credit disputes on derogatory credit tradelines that are not yet 24 months old. Credit disputes will halt the mortgage process. Once credit disputes are retracted, borrowers’ credit scores will drop.
If loan officers anticipate a serious drop in credit scores once borrowers retract credit disputes, downgrade it to a manual underwrite. VA and FHA loans allow for manual underwriting.
The Automated Underwriting System (AUS)
Run the file through the automated underwriting system (AUS). Go over the conditions of the AUS with the borrower. Make sure borrowers can meet all conditions on AUS.
If the loan officer is unclear about the borrower’s income, get employment verification before issuing a pre-approval letter. Make sure borrowers have sufficient qualified funds and gifts. Check and double-check with your own lender overlays.
How To Avoid Stress During Mortgage Process By Properly Qualifying Borrowers
Double and triple-check the borrower’s income, credit, credit scores, credit report, financials, public records, your mortgage company’s overlays, assets, liabilities, and AUS before issuing a pre-approval letter. If a loan officer follows the above steps, there is minimal chance of a last-minute mortgage denial and stress during the mortgage process.
Some extenuating circumstances come up by borrowers, such as a job loss, job re-assignment, family emergencies, personal situations, or other factors. Make sure to share it with your loan officer to remedy the situation and find a solution early in the loan process.
December 8, 2022 - 3 min read