Mortgage Pre-qualifications

How many times as a realtor have you had the phone call stating "we cannot close" or "I'm sorry the loan was turned down"? All of a sudden you have upset buyer's, seller's and your pay check and lively hood are put in jeopardy. Let's not even bring up your reputation should you have recommended the lender that "botched" the deal! Why do I bring this up? Doesn't this happen to everyone? Can this be prevented?

The answer to the later is yes! We has mortgage lenders must do our due diligence when evaluating any file to ensure that there are no surprises. If there are going to be "unknowns" or possible "hiccups" then all parties need to know about them upfront. Every file is different and to our defense at times we get misinformation or a "unique" property and a wholesale list of other items that are involved in properly piecing together a mortgage loan. However, there are things we must do in order to ensure that when a pre-qualification is given the loan is 99%-100% going to close. I truly believe that's why PMG has been so successful in light of a "challenging" housing market. Now we're not perfect but I can only recall one file that was not able to close within the last 24 months and with that being said I was able to line up alternative financing for the client and the closing date was still met! How is that possible when there have been a wholesale list of changes in the real estate community?

We have a professional responsibility to do what is best for the client and one of those "responsibilities" is "due diligence". This means collecting all income and asset documentation up front (i.e. pay stubs, taxes, W2's, bank statements, IRA information, 401k statements, and any other necessary financial documentation). Taking a complete application and by complete I mean never leaving a stone unturned. Do they pay child support, alimony, have they been divorced, how many children do they have and what are their ages, have you had periods of being laid off repeatedly, what is the employment situation like, what has the residence situation like, do they pay rent and if so how much and to whom, do they pay cash or check and lots of other "pertinent" information. By pertinent I mean; what type of home are they purchasing, is it on acreage or in a subdivision, will there be seller paid closing costs, does it need any repairs or are there foundation issues, etc. Not only is this beneficial for the sellers and real estate agents but it is also extremely beneficial for the buyers. This way they know what to expect upfront on exactly what they qualify for and the piece of mind that the "leg work" has already been completed in connection with the biggest purchase they will ever make. This also helps us determine what product is going to meet the buyers needs while at the same time being more effective and efficient in the manner in which we deliver our services!

I had a situation just this week where I met with an individual who thought they were in good shape to purchase a home and I agree their credit and housing information were fine. However, when I collected all the income and asset information and put everything together there was no way to make the deal work. A portion of the income she was including in her figures could not have been used in the application and she ended up not purchasing a home. However, I did not leave her empty handed and gave her a small list of items she needed to do in order to purchase a home in the coming months. Should she do the things I recommended the home buying process will go just fine when she is ready to pull the trigger again. The buyer's agent really appreciated my "due diligence" in not stringing this file out and I would like to think the listing agent and seller also appreciated their home not getting tied up on a deal that had no chance of closing.

Professional Mortgage Group is actually in the process of updating their Quality Control plan to more closely resemble our current lending environment and real estate market. Rest assured when PMG issues a "pre-qualification" or "loan commitment" that we have done our "due diligence" and that deal will close just fine.

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Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

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