Mortgage Process Can Be Stressful If Borrowers Not Properly Qualified
This BLOG On Mortgage Process Can Be Stressful If Borrowers Not Properly Qualified Was UPDATED On June 2nd, 2019
The mortgage process can be stressful. The number one reason why mortgage process can be stressful is that the loan officer did not properly qualify borrowers. Another reason why mortgage process can be stressful is that mortgage processors did not process the loan correctly prior to submitting it to underwriting:
- There are many things to consider when buying a home
- Moving to a new neighborhood where do not know anyone can bring on a lot of stress
- So can getting to know the area and settling children to new schools
- However, the most stressful process in the home purchase process is the mortgage process
- Many folks are all upbeat when they first consult with their loan officer and get qualified
- By the time closing time rolls around, their loan officer is probably their least favorite person
Top Reasons Why Mortgage Process Can Be Stressful
Many tasks requested by loan officers might not make a lot of sense to home buyers.
- For example, a loan officer will probably ask you for two months bank statements
- Borrowers provide 2 months bank statements
- All of a sudden borrowers will be asked to go to the bank and get two months worth of printouts of bank statements
- Not just getting 60 days of printouts but to get it signed by the teller and have the teller date it and stamp it
- Why the task of supplying bank statements twice?
- On cases like these, loan officer probably may have noticed overdrafts on bank accounts
- Even though borrowers provided two months bank statements, there is a line item on every bank statement where it shows YTD overdraft fees
- To avoid more explanations on overdrafts on prior months, loan officer probably will advise borrowers to just get bank printouts
- Might not make sense, but many things in the mortgage world do not make sense
Deposits Over $200 On Bank statements
Borrowers with irregular deposits over $200 on your bank statements, the loan officer will probably ask to write a letter of explanation and source the deposits.
- For example, if there was a deposit on the bank account for $10,000, the loan officer will ask the source of deposit and documentation
- If it was a gift from parents, the loan officer will ask for 30 days of bank statements from parents account
- This way it will provide paper trail funds leaving parents account and going into borrowers
- Copy of deposit slip and updated bank statements after gift funds is required by both parties
There may be a time where borrowers get conditional mortgage approval and submit all the required conditions but then the underwriter will come back with more conditions.
- This is when many get upset and start losing their patience
- Loan officer might ask borrowers for update paycheck stubs and updated bank statements
- Borrowers submit updated paycheck stubs and bank statements and all of a sudden, the underwriter requests a letter of explanation why there was a $300 deposit and $1,000 withdrawal
- They also want proof or canceled checks
- The mortgage process requires a lot of patience
- Instead of arguing or trying to make sense, the best advice is just needed to submit whatever the underwriter requests
- The loan officer should explain the reasoning behind why so many requests are being made
- Consumers must realize that the mortgage business is one of the most regulated industries in the country
Issuance Of Pre-Approval
All Mortgage Pre-Approvals should never be issued by loan officers. Loan Officers should issue pre-qualification letters. With pre-qualification letters, home buyers can shop for homes. Buyers should never enter into a real estate purchase contract with a pre-qualification letter. All pre-approvals issued at Gustan Cho Associates Mortgage Group are full loan commitments that have been fully underwritten and signed off by mortgage underwriters. Home Buyers should only enter into a real estate purchase contract with a solid pre-approval letter that is signed off by a mortgage underwriter. The number one reason why mortgage process is stressful is that home buyers enter into a real estate contract with a pre-approval letter that has not been underwritten and signed off by a mortgage underwriter. This is another main reason for the last minute loan denial.