A bad experience with applying for a mortgage might have you thinking that you can’t qualify for a home loan when you really can.
Part of the problem might be that you're not talking with the right people.
Todd Huettner, president of mortgage brokerage Huettner Capital in Denver, says that "when you call a help desk or a call center for any lender, you wind up talking to people who are essentially customer support or telemarketers. They do not have underwriting experience and cannot answer specific questions about your unique situation."
If the income, down payment and other financial numbers you provide to the person on the phone don’t allow the computer to automatically approve you, your mortgage application could be needlessly rejected.
Even worse, you could get prequalified (which is not the same as getting preapproved) when a closer examination of your finances reveals that you don’t meet underwriting guidelines.
"A lender has to review your current loan, bank statements, pay stubs, tax returns and information about your property to be able to give you accurate answers. Most loan officers just get basic information to complete a loan application without really knowing if you will qualify for a loan," Huettner says.
"Your lender must review your income and asset documentation to be able to really know if you will qualify for a loan. You would not believe how many surprises show up on tax returns that enable or prevent someone from getting a loan."
Given these problems, whom should home buyers talk to when they need a mortgage?
If the automated programs are rejecting your application, you need to work with a lender that offers more personalized service. For example, instead of using an online-only lender, you can visit a lender in person so you can ask lots of specific questions about your situation and get detailed answers.
Another option is to call lenders that make the names and phone numbers of individual lenders/brokers available so you can directly call a person who isn't just a customer service rep.
That being said, sometimes the job requirements to become a loan officer are quite low, so you may have to kiss a lot of frogs.
Persistence is key.
Huettner also advises finding out the following information about loan professionals before doing any business with them:
- How long have they been doing loans? "Most lenders have less than five years of specific experience; you want a lender with 10-plus."
- What specific experience and education do they have for doing loans? A formal education in finance is desirable.
- Do they have knowledge and experience working with real estate, appraisals, title, underwriting and tax returns?
- Do you know any of their clients, or can you speak to some references?
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