by: Gaye Jones ~ AnnieMac Home Mortgage
When I first got into the business over 30 years ago, we used to say that a loan was like a table with 4 legs. If one leg was weak the table could still stand, the 4 legs were credit history, assets, income and debts. But after the crash of 2008-2010 you will need all 4 legs to obtain a conforming loan.
There have been so many new restrictions put on the mortgage and banking world that if just one leg of the table is weak, you may not qualify. As an example, you could be putting 50% down or have enough funds in the bank to pay cash, but if your monthly income versus your debt load doesn’t meet the guidelines, you wouldn’t qualify.
Guidelines for obtaining mortgages is often changing, so you need to make sure you are working with an experienced loan originator or banker that knows the guidelines and can set up a file so that underwriting will approve the loan. Unfortunately, there are many in the business (both online and in person) that are taking your information and only looking at the surface.
It takes someone that is knowledgeable of the guidelines to make sure, up-front, that you are truly qualified. The underwriter’s role should be to check the information and documents the loan originator submits as to whether it is accurate and meets guidelines. As a buyer, you don’t want to spend money on appraisal, inspections, etc. only to find out halfway through the process that the underwriter turns down the loan because you didn’t meet the guidelines.
If you are considering purchasing a home ask around or ask your Realtor who, locally, is experienced and good. And prequalify early, two to three months prior to wanting to buy is recommended.