When It Comes To Getting A Mortgage, Patience Is A Virtue
If you are in the process of buying a home or refinancing your current mortgage, you may need to exercise a great deal of patience. Mortgage lenders have now become the gold standard in caution. Where once they would approve a monkey with a social security number, now you will have an easier time getting top secret clearance from the federal government. And why shouldn’t they? After all, it’s our money they are lending us, right? I am not saying that banks shouldn’t be careful and take necessary precautions before issuing mortgages. However, they have gone completely overboard in the opposite direction.When I first got into the mortgage business, long before there was any such thing as automated underwriting, there was a a standard that every one lived by. Banks, brokers and lenders would look at a mortgage application and ask: does it make sense? And if the answer was yes, then generally, the loan would be approved. If it did not, then it would be denied. Then came the housing boom. And when the question “Does it make Sense?” was asked, everyone said “Who Cares?” Now we have flopped over to the extreme opposite and when the question is asked “Does it make Sense?” The answer is “Even if it does, you probably won’t get approved anyway.” These are our banks, people. The ones we spent a trillion dollars bailing out which is why it stings a bit more.
If you need a mortgage, start early to avoid any disappointment.
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Mortgage Lenders Are Crazy!!!
This is a simple word of caution to anyone seeking a home loan out there. If you think that banks and mortgage lenders are rational business people, think again. Just as they were insane before the housing crash by lending to anyone with a heartbeat and probably some without heartbeats, the are equally insane now with their over cautious lending practices.
I have client who was supposed to close on their loan on June 30th and they are still waiting. The reason? The home they are buying is owned by a trust. I don’t want to get into what a trust is except to say that people set up trusts so that when someone dies they can avoid probate and the trust can sell or transfer the property to whomever.
It is not very complicated, the transaction is the same as any other. Except the lender is making it soooo difficult, requesting one stupid document after another, none of which really have anything to do with trust. The latest request is that the bank would now like a copy of the the sellers death certificate. First of all — the seller is the trust (They Know that), secondly, do they not believe that the person actually died????? Can you tell that I am a little P O’d?
I guess, my advice to you is that if you are in the process of buying a home, make sure all your ducks are in a row and your loan is cleared to close well ahead of the closing date. In this day and age you never know what kind of crazy conditions the lender will require before they actually lend you the money.
Avoid and complications and Get Your Approval Completed Quickly At Lending Tree
Mortgage Commitment Letters
Mortgage Loan Commitment And Mortgage Prequalification Letter Myths
Every day at my office I get calls from Realtors with whom I work asking me for a prequalification letter for this client or that. A prequalification letter is nothing more than a letter on a mortgage company’s letterhead. It is not a mortgage commitment.
If you have ever read any mortgage company reviews, you will see that Just because a loan officer or lender issues you a prequalification letter, it does not mean you will be approved for a mortgage loan.
The mortgage prequalification letter states that the loan officer has reviewed the home buyer’s credit, income, work history etc and that the borrower is “Pre-Qualified” for a mortgage with a certain dollar amount.
Notice that the word is “PRE-qualified”. Pre meaning before the actual qualification.
Almost always, these letters state that the pre-qualification is not a mortgage commitment and that a commitment may only be issued after a complete loan package has been reviewed.
What does this mean?
What it means is that a pre-qualification letter is not worth the
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paper it’s written on.
It is non binding, and the lender or broker is in no way obligated to issue a mortgage to you.
A mortgage loan commitment on the other hand is a document which virtually guarantees that you will receive a mortgage as long as you provide the lender with all the documentation and conditions required.
Your loan has been reviewed by an underwriter and is approved.
A mortgage loan commitment is binding and the lender must issue the mortgage if you fulfill all the requirements. After the lender issues a commitment letter to the borrower it has to fund that loan. It can not “change its mind” as to weather they want to give you the money or not.
So why is this important?
First of all, loan officers write pre-approval letters all the time at their own discretion. It’s nothing more than his or her opinion.
So the bottom line is that you may have been pre-qualified for mortgage, but when it comes right down to it, you may not be able to actually get approved for a loan.
I’ve seen cases where clients have gotten pre-approval letters, gone out and put a deposit on a home, packed their furniture, rented a moving van only to find out at the last minute that they were turned down for the loan.
This is a terrible crisis. They lost their home, their deposit money, everything. And on top of it, they have nowhere to sleep.
Avoid all this and get a Mortgage Loan Commitment from the start.
Not only will you avoid the possible nightmare scenario that I outlined above, but you will also have more bargaining power.
When you negotiate for your new home with a seller, having a mortgage loan commitment in your hand is virtually the same as being a cash buyer.
This gives you much more leverage than the buyer who merely has a pre-qualification letter. It says to the seller that you mean business and it presents virtually zero risk to the seller.
A mortgage loan commitment will help you win the home over a competitive buyer and can also help you negotiate a lower price for the home.
In my opinion the best place to go for a loan commitment is LendingTree Mortgage Loans .
Lending Tree is great because they are a one stop shop and they can have up to four excellent loan offers in front of you very quickly. Getting a Mortgage Loan Commitment through Lending Tree, makes the process a piece of cake.
To get your mortgage commitment letter right now go to LendingTree Mortgage Loans
