Since a loan pre-approval is required BEFORE making an offer on a home, why do so many loans fail AFTER the home is under contract?Finding the home and getting your offer accepted is the EASY part.
Three Ways A Mortgage Lender Can Cause Your Loan to Fail!
Since a loan pre-approval is required BEFORE making an offer on a home, why do so many loans fail AFTER the home is under contract?
Finding the home and getting your offer accepted is the EASY part. Once a contract is in place on a home there is a team of people behind the scenes preparing for your closing. You have never met most of these people and you’re relying on the people representing YOU to be your best advocate. Believe it or not, those on YOUR team – the real estate agent, lender and title company -- can drop the ball in crucial ways that can cause your transaction to fall through. One of the most important decisions you’ll make when buying a home is the Mortgage Lender you choose to underwrite your loan.
WHO YOU CHOOSE matters! Here’s what you need to look for in a lender.
- The lender should get to know you, beyond just monthly income and a credit check.
They need to know if you’re self-employed, own side businesses, where your down payment is coming from, how many savings accounts do you have, what are your extraneous financial obligations, if this is an investment property or a second home, if your money tied up in stocks or is in a foreign bank account… If they’re not having a conversation with you and asking questions like these, you should keep searching. The more information gathered upfront, the better a lender can predict and plan for problems that could potentially down the road.
- The lender should be willing and able to troubleshoot and switch gears along the way.
What if a problem does pop up? Throughout the loan process, your lender will be digging deep into your bank statements, tax returns, savings accounts and analyzing every move you make. There is the possibility they’ll discover an obstacle. If this happens you need a lender who is knowledgeable and experienced enough to find solutions that keep the loan alive. There are plenty of lenders out there that can’t, or even won’t, try to problem solve and think outside the box. OR they may be affiliated with a larger institution that ties their hands and doesn’t allow them to find solutions. This is where a loan can get denied and it doesn’t always have to end that way. Many times I had a buyer’s financing fall through with one lender and another lender is able to save it. So if they were all the same, that wouldn’t be possible.
- The lender should be a good communicator.
Ok so this may not seem that important. But good communication goes beyond whether your lender will answer your questions in a timely manner. Remember that TEAM we talked about earlier? It’s important your lender communicate and keep everyone informed on how the underwriting is going, when the appraisal has been ordered and returned, and are they on top of all the major timelines and next steps. They also need to work with all parties to get closing documents completed accurately and on time. Lenders who don’t communicate well can cause delays in closing – which in turn might cause the transaction to fall through completely.
A great lender does more than take your completed application and issue you a pre-approval letter. They partner with you AND the other members of YOUR TEAM and work together to make your dreams of homeownership a reality.
If you need the names of some great lenders don’t hesitate to reach out and ask me.
And what happens if the mortgage lender tells me I’m not pre-approved? Stay tuned for my next article! And if you can’t wait call me and we’ll talk about what to do next in that case.
Danna Flemons, REALTOR
JP & Associates
After graduating college, Danna worked for over 15 years in the advertising and marketing industry helping companies brand themselves and stand out from their competition. Danna's professional backgro....