How to successfully navigate getting a mortgage


So, you've decided its' time to buy a house or condo/co op.  Prices for homes are stabilizing again and let's be honest, today's rates remain at historical lows.  It's a perfect mix to buy.

When you're ready, you need to remember two things.  1.  The person you are meeting about your mortgage is not approving your loan and probably can't properly qualify your loan.  He or she will run it through a program called "LP" or "DU" which issues a conditional term sheet that empowers some to feel that they know all and your loan is approved   Stop them right there.   2.  The person who approves your loan is someone you probably will never meet.

Deductive reasoning states that if you're not meeting the person with the power to approve your loan, then that person is not meeting you.

How do you sell your financial ability to that person.

There's one quick answer

Do not play the "manana" game when it comes to getting documentation into the bank.  Before you meet with the bank, make copies of the last two years of your income taxes with all schedules and 1099's and W2's (etc) attached to them.  Do NOT leave one page out.

Make copies of the last two months of every bank statement and investment account that you have. Do not leave out blank pages, even if they are advertisements.  Include them.

Make copies of the last 30 days of your income pay stubs from work.

Be prepared to list every employer you had in the last two-years

Be prepared to know what you made from them

Be prepared to list every place you lived in the past two-years

If you rented, make sure you have a piece of paper with the name, address and phone number of the landlord or rental management company from your apartment complex.

If you're self employed, bring everything above plus your K1 or other self employment forms and include the last two-years of your self employment tax returns. 

Make sure that they are accurate and have your Accountant or CPA sign them or write a letter stating he or she reviewed them and it appears to be accurate based on previous year income returns.

Include explanations for ANY late payments on your credit report.  Any.  Period.

Pay off all collection and all judgements prior to applying for a loan.  Keep proof that they are paid in case they still show on your credit.

Take all of that and put it on your lap.  As your loan officer goes through the application process he or she will ask questions that will trigger the need for you to pull all those forms out piece by piece to back up what you're saying.

If you do this - your loan will go into the underwriter and the underwriter will have a complete package to issue out a decision.

If you do not, the underwriter will have a list of things that he or she needs to issue out a decision

And, there is nothing worse than an incomplete loan application when there are numerous other files competing against your file to be approved and closed.

No underwriter wants to keep pulling your file from a rack to put missing information into it.  That files becomes the "cursed file" and a sour feeling develops.  It typically sits when others move

All because information was missing and the underwriter was not understanding the situation.

So, get all your documentation together for the very first meeting.  You'll find this much more successful for you this way