Working with a Mortgage Professional: Why Quality Matters
The mortgage crisis of the last few years has caused an upturn in people shopping for a new home loan, or refinance option using some type of mortgage professional. There have been so many changes affecting the mortgage lending industry it is almost impossible to keep up with it all. Most changes are made to protect the consumer, but in the end, the lender is insured protection as well.
Mortgage professional will deal directly with mortgage loan originators and barter the best terms and payments for you and your personal financial situation. The broker or other mortgage professional will be up to date with all of the changes in the mortgage loan rules and qualification requirements.
New Mortgage Rules
To make the loan application process go as fast and simple as possible, the borrower should be prepared to meet the new loan requirements.
- Proof of all assets and income. A borrower must show their entire net worth and be able to show the financial ability to repay the loan.
- Proof of employment. Not only will proof of employment prove that you can pay the loan payments, it allows the mortgage loan originator to judge if you are in a stable position with your employment. Individuals who are self-employed must show a two-year income history.
- Proof that the lender has the ability to pay homeowners insurance and property taxes. These extra expenses are often included in a mortgage payment. When not part of the monthly payment arrangements, the borrower must show proof that they can pay the additional expense of being a homeowner.
- Proof of any additional mortgages that you or your business holds on other properties. While this should be included in the proof of all assets and income, it is important to mention again. The borrower’s payment record on other loans can often determine the outcome of a mortgage agreement.
- Proof of any other child support or alimony payments that were not included in income or expenses. This is an income, or an expense. It does figure into the borrower’s ability to pay.
- Be prepared to prove that your Debt to Income (DTI) ratio is below 30 percent. If 45 percent of your income is already paying debt and living expenses, chance are very slim that you will qualify for a mortgage loan.
- A good credit history and score is required to land a home mortgage. Before applying for any loan, consumers should look over their credit report and know their credit score. There are many things that will decrease a credit score including having too many credit cards or late pays. If your credit score is low, investigate what can be done to get it higher.