There are all sorts of folks and businesses who say they can handle your home purchase loan; your credit union, a huge mega bank, a mortgage broker and so on. Gone are the days when most anyone could get a home loan. The underwriting guidelines and meticulous paper trail needed for a loan are incredible. Yes, your lender does need to know what that $150 deposit was into your account last month - even if it was birthday money from your parents. No, don't get pissy about it, these are the lenders who overlooked all that stuff in the past and got stung by it.
There are a huge variety of loan programs, for different down payments amounts, credit scores, interest rates and so on. And all have slightly different underwriting requirements. A good loan officer knows these specifics and stays on top of changes to programs. A not so good loan officer looses track.
So why does that matter? It can be the difference between you getting your loan or not, or missing the close date or not and being at the grace of the seller to extend the close date. It can cost your more money in fees and points. It can be the difference in you being able to buy your house, or not.
Here are a few examples of the kinds of issues we see come up in the lending on real estate purchases.
I had a buyer client withdrawing money from an IRA and receiving gift funds for her down payment and closing costs. She and I both asked the loan officer ahead of time if there was any special way the money needed to be handled. No, no special anything. This was communicated in writing an d by phone. So imagine our dismay when THE DAY BEFORE SHE WAS TO HAVE CLOSED ON HER NEW HOME, we were told underwriting didn't like how the funds had been co-mingled. She needed to withdraw even more money from the IRA and handle it a certain way. Thankfully she had the additional money, and thankfully the seller was willing to delay closing by the two necessary weeks, at no charge to the buyer. It could easily have happened that a seller would demand an increase in the sale price to extend closing, or the buyer could have lost the lock on an interest rate, forcing a higher interest rate, or the seller could have refuse to grant the extension; losing the buyer the house and the money she had spent on inspections and appraisal. The loan officer, in this case, either should have known there was a special way the funds needed to be handled, or should have known to ask. I knew to ask, and even my asking should have prompted her to check with the underwriters before answering our query back at the beginning of the transaction.
A few years ago, my husband, yes, my husband, refinanced our house through Wells Fargo. Their refinance office was in Florida, and the whole thing was done primarily by email. The folks in Florida, a state littered with subdivisions, kept asking for the C, C & R's for the subdivision in which we live. There's no such thing at SE 26th and Clinton. In the absence of C, C & R's, they then required a survey of the property, because, if we didn't live in a subdivision, then clearly we must be out in the country. Round and round we went, convincing them neither case applied. This, in the day and age of google earth and all.
The whole loan process is a series of data requests and performance requirements. This we know. And if those requirements and requests are timely, that is, well in advance of closing, they are reasonable and a part of the process. Arriving in the eleventh hour, and delaying closing can be what makes them seem unreasonable. Many lenders collect all the data, and only submit the file to underwriting at the end of the transaction, in advance of preparing the loan documents for closing. The files of a loan officer inexperienced and unknowledgeable about the idiosyncrasies of particular loan products are often kicked out of underwriting, right before closing, with a myriad of requests that can take days, or even weeks to fulfill.
A "good" lender is one who is familiar with our local properties and customs (see above about subdivisions), who knows the different loan programs and stays on top of changes, and who communicates well, and promptly. While I prefer loan officers who don't work for the large banks as they tend to be a bit more nimble and less encumbered by a behemoth process, I have seen a few very good lenders from large, national banks. But 1-800- get-loan, or some such, scares me. All parties in the transaction need to be able to talk to a specific person, who's job it is to work on your loan. A loan number, and a phone or email answered by a general staff person at the institution doesn't bode well for getting your loan done on time, and to the terms to which you think you have agreed.
I'm glad to give suggestions for lenders, whether you are purchasing or even just re-financing. Get in touch: leslievjones@gmail.com or 503-312-8038
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