I’m not surprised you are frustrated…
One of the biggest financial choices people make in their lives is buying a home. Some like to treat it like going through a drive-thru, I’ll take a number 3, large, please… no different than pushing a few buttons for an online application with no real deep human interaction, someone willing to be vested, take the time for your best interest. What I share with everyone, “What you and I feel is common sense, the Federal Government can have a different expectation when it comes to getting a home loan.” A few buttons will not always pick up on all the details needed for a home loan. That is why we all hear stories of home loans not closing on time or at all. A home buyer will easily spend about $1,000 on inspections and appraisal, and then MOST lenders will start to dig DEEP into the loan specifics.
- Did you realize that it will take about 12 plus people just to formally approve the loan?
- That there will be at least 300 and usually over 500 pages to be reviewed, verified, and approved?
- Why wait until after you spend $1,000 to get a deeper review?
- Why such blind trust in one of the biggest financial choices someone will make?
Step 1: Conversation about your home goals and dreams
There is another way. Having a trusted Loan Originator that will take the time to have a great conversation about the homebuyer goals and dreams is a great start. Talking about employment history, how income is earned, where is the money coming from for the down payment, closing costs and getting a history of some additional personal information. This is where a lot of the Federal Government common sense can throw a curveball. Too many small details that make a huge difference to go into great detail in this short blog. Every person is different. We are all unique. Yet the government will treat us all the same with their guidelines. Hear it every week that home dreamers didn’t realize something or another. I share with them, “The great news is it is not a week or two before closing, and you spent $1,000 on inspections and appraisal already.”
Step 2: Review what it looks like on closing day
The next step, in my opinion, is to review an estimated closing scenario. Here again, I get calls every week from home buyers that went with another lender just finding out what the closing costs are and totally taken back, shocked! Don’t be that person. Don’t allow your chosen Trusted Loan Originator not to take the time to review EVERY single penny involved in the home purchase. Too often, we hear and see the loan originator just send this over an email and say read it at your leisure. Really? It’s one of the biggest financial choices most people make. You will most likely find that most Loan Originators do not feel confident about explaining every penny. They avoid taking the time to go over every line item on the Estimated Fee Worksheet or Loan Disclosure. This is one of the most important 30 minutes you will spend with your Trusted Loan Originator. Know almost exactly what it will look at for closing day before you even look at a home. Why have any surprises? Walk into a home you want to put an offer in on and know what that will look like the day you close. Imagine the confidence you will feel? You will find out at some point what that would be, why wait until you have a contract, or a couple of days before closing?
Step 3: Supporting documents verify the details
Supporting documents are required to be verified before you close. Here again, we hear some people don’t want to provide supporting documents until they have a contract and spend $1,000 on inspections and appraisal. This is leaving the door open for potential problems. Just a few things we see where people shake their heads, not knowing it will make a difference on their loan.
- You need a two-year history of income when you earn commissions, bonuses, tips, self-employed, part-time jobs when you also have a full-time job. The government will want to look back and see that each one of these line items are stable or increasing. So many more factors in the income and employment factors to even begin to mention most of them. Just an example.
- Cash cannot be used to purchase a home. The Patriot Act, sourcing of where the money is coming from, can be a little intrusive to some. Especially if getting a gift from someone. We have seen where someone will be a little irritated with the request for sourcing the money. The government only requires a 2-month look back. So deposits made over two months before closing are not under this Patriot Act analysis. You cannot just sell a motorcycle, jewelry, or anything and put cash into the bank account being used for the home loan within two months of closing. Having a clear plan for sourcing all the money is important.
Final thoughts… You have more control in the process than some realize. I would encourage you to take one of the biggest financial choices serious enough to make time to find and work with a Trusted Loan Originator that will go deep BEFORE you start putting in offers. This way, you can be confident once the contract comes in until moving day!
Sam Dongilli is a leading National Leading Loan Originator and has placed in the top 100 in customer service Nationally within a field of over 30,000 loan originators. Sam is successfully leading a team of highly talented professionals, consistently delivering a memorable home lending experience. He is encouraged, inspired in his leadership role by his faith, family, and serving in the community.
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