The lending process has become tougher than ever. If you are out shopping for a house, make sure to start with the mortgage lender. If you think your credit is great and don’t need to check with the lender first, you are making a huge mistake.
Today’s loans are so riddled with paperwork, even those coming in with half down and high credit scores are suffering from the consequences of the financial break down in the United States.
Due to the overwhelming amount of foreclosures and bank repossessions, the government is not the only ones making the rules, however, Fannie Mae and Freddie Mac are the dominant players in the game. The strictness to which the lending guidelines have swung has made the process of obtaining a home painstakingly difficult. Give yourself plenty of time to find all the documents a lending company will require from you.
It is easier to do this at the beginning of the home buying process, than it is when you find one. Once you find a house, you should go ahead and take care of finding insurance, reviewing inspections, packing your stuff up, cleaning your old place, getting moving help and wrapping up what remains of your financial paperwork.
That should be enough to keep you occupied with your home purchase. If you wait with the loan, your time will be consumed doing much of the above along with digging up documents for the mortgage broker.
Things like pay stubs, bank statements and work history is common. The new things being asked for and reviewed, over and over again, include things like your tax returns, your marital status, any additional income, address changes. Each one of these areas may seem ridiculous to you, but if the underwriter on a loan sees fit to get more data, you will be the one tasked to find it.
Herein lays the problem. In North Carolina, our due diligence clause on the contract states that the buyer will have all of their exploratory work done by a certain date. This includes the loan package.
Each time the underwriter sends the loan back for further clarification, you have to stop what you’re doing, gather it up and send it in. This will cause quite a headache for all involved with the sale. It can also delay closing. This will cost you money.
Now, delaying closing can create a whole other group of problems besides costing you money. When you are moving into one house, most likely someone else is moving as well. The domino effect of a deal gone bad will leave some families with all their belongings in a moving truck and sleeping in hotel rooms. Is your procrastination worth it?
Money, aggravation, and stress are what you will experience if you don’t start your home shopping by working with a lender. That’s a fact. Here’s another fact. If you think your credit is so good that you won’t have to jump through hoops, think again.
Take the time to contact your Realtor and a mortgage lender. Together, they can make set you up for a smooth move and a home buying experience that will bring you joy.